1920-06-08

THE SPEAKER'S CHAIR.


Rt. Hon. Sir ROBERT BORDEN (Prime Minister):: Some two weeks ago His Honour the Speaker received from the Secretary of the Empire Parliamentary Association in London the following telegram:
London, May 19, 1920.
Rhodes,
Speaker-House Commons,
Ottawa.
Lord Chancellor and Speaker, joint presidents and members of Empire Parliamentary Association in Lords and Commons, ask you to accept as gift to Canadian House Commons the Speaker's Chair as an abiding token of good will between both Parliaments. Suggested that chair should be replica of that in British House of Commons. Colonel Amery, Undersecretary for Colonies, who will be in Ottawa about end of this month, is bringing photographs of British chair and will consult you.
Degvidle,
Commons, London.
Since then Colonel Amery has arrived in Ottawa. He has brought the photograph, which I shall lay upon the table of the House, and which will indicate that the chair which it is intended to send us is beautiful, dignified and ornate. It is my duty now to move a resolution, which I hope my hon. friend the leader of the Opposition (Mr. Mackenzie King) will second, setting forth our appreciation of this generous and thoughtful gift and authorizing the Speaker to convey the thanks of this House to the donors. It has been the custom in this House for many years in the past-I do not know how long-that the Speaker upon retiring should take with him as a memorial of his occupancy of the high office of Speaker the chair used during his term. Of course, if this gift is accepted, that custom could not very well prevail in the future.


Sir GEORGE FOSTER:: Give him a photograph of it.


Some hon. MEMBERS:: Hear, hear.


Robert Laird Borden: My right hon. friend the Minister of Trade and Commerce suggests that a photograph of the chair might be presented to the Speaker in lieu of the chair itself.


Mr. BUREAU:: Give him a gold miniature.


Robert Laird Borden: What may be done in the circumstances would be for hon. members to decide. It may be the pleasure of the House that some memorial, possibly a chair such as has been in the past used by the Speaker, be presented to each Speaker upon his retirement. But that question does not arise at the moment.
It only remains for me to say that since the Parliament House which stood upon this site was destroyed by tire a few years ago we have already been favoured with many indications of the good-will of our brethren in the great Mother Parliament beyond the seas. This further token of good-will is but another illustration of the spirit of comradeship which prevails between the members of this Parliament and the members of the old Parliament in the United Kingdom. We are united by the ties of common ideals, of like institutions and traditions, and of a common allegiance. I hope that it may be our purpose now and at all times in the future to work with them in the best of good feeling and co-operation for the fulfilment of the aims of advanced democracy.


Some hon. MEMBERS:: Hear, hear.


Robert Laird Borden: I hope that the House will accept the resolution which I now propose, and which will be seconded by Mr. Mackenzie King:
That the offer of a Speaker's Chair to the House of Commons of Canada by the Lord Chancellor and the Speaker of the House of Commons as Joint presidents and by the members of the Empire Parliamentary Association in the House of Lords and in the House of Commons of the United Kingdom be most gratefully accepted, and that Mr. Speaker do inform the donors of the high appreciation of this House for the gift and particularly for the sympathy and good-will which it expresses.


Hon. W. L. MACKENZIE KING (leader of the Opposition):: Mr. Speaker, on behalf of hon. gentlemen on this side of the House it affords me great pleasure to have the opportunity of seconding the motion which has been made in such appropriate words 2051
by my right hon. friend (Sir Robert Borden). If there is one thing above another which we in Canada have reason to be proud of and to be grateful for, it is that our constitution and parliamentary institutions are to all intents and purposes a replica of the constitution and parliamentary institutions of the Mother of Parliaments in the Old World. A visible sign of this great invisible reality such as is embodied in the gift it is our privilege to accept, is one of the links of Empire which make for that unity we all desire in the things which are fundamental to liberty and to the preservation of it.


[Stage Direction]
Motion agreed to.

Hon. ARTHUR MEIGHEN (Minister of the Interior):: I beg to lay on the Table
orders of the Director of Coal Operations. Numbers 1 to 144 inclusive, as asked for
yesterday.



REPORT TABLED.

[Stage Direction]
Annual Report of the Department of Public Printing and Stationery for the fiscal year ended March 31, 1919.-Rt.' Hon. Mr. Sif-ton.


[Stage Direction]
Bill No. 159 (from the Senate), for the relief of Mary Oakley.-Mr. Fripp.
Bill No. 160 (from the Senate), for the relief of Margaret Elizabeth Cooper.-Mr. Mowat.
Bill No. 161 (from the Senate), for the relief of Catherine Burfoot.-Mr. Nesbitt.
Bill No; 163 (from the Senate), for the relief of Thomas Lindsay Thacker.-Mr. Blake.
Bill No. 164 (from the Senate), for the relief of John Durose.-Sir Sam Hughes.

[Stage Direction]
On the Orders of the Day:
Mr. W. F. MAiCLEAN (York South): Is the Minister of Railivays aware that the new Union Station at Toronto, which is being built largely at the expense, either directly or indirectly, of the people of this country, has been completed and is practically ready for occupation, but that for soime reason or another the use of it is delayed? Is he also aware that the people of Toronto and of Ontario generally would Bke to see the splendid accommodation pro-
[Stage Direction]
vided in that station for postal, express and passenger 'business, put at their disposal at the earliest possible date? If some legal difficulty stands in the way, I should like to know -whether the Government are prepared to remove that and to give the public the use of the building?
Hon. J. D. REID (Minister of Railways):: The work in connection with the new station at Toronto is not and will not be completed for some little time. The work has been delayed on account of strikes and shortage of material. The Terminal Railway Company, who are constructing this station, tell me that every effort is being made to complete it at the earliest possible moment.



S.S . CANADIAN INVENTOR-DELAYED IN SAILING.

[Stage Direction]
On the Orders of the Day:
William Lyon Mackenzie King: I have in my hand a message sent on behalf of some British Columbia shippers complaining about the delay in sailing of one of the Government Merchant Marine vessels. May I ask the Minister of Marine if he can give to the House any information in regard to the questions asked. The telegram reads:
Information that steamer Canadian Inventor booked freights Mareh-Aprdl loading has not yet sailed or any indication of sailing. Shippers have had orders cancelled on. them with tremendous loss. Understand' that this boat held up owing to some dispute between Government and contractors over painting boat which means at most few hundred dollars and in any case would not prevent vessel going to sea. Owing to falling market, incompeteney and delay on part of Government has made tremendous loss to shippers here. Suggest you make inquiries in respect to this matter.
I am sorry I had not an opportunity to show the telegram to my hon. friend before bringing the matter up in the House. If he has any information, I shall be glad if he will give it.


Hon. C. C. BALLANTYNE (Minister of Marine and Fisheries):: At the moment I have only a slight knowledge of the matter, but I shall be very glad to give the hon. member a more complete answer to-morrow. The delay is not due to anything that could be avoided by the builders. I understand it is due to the fact that a strike has existed in- the shipyards at- Vancouver for some time.



INQUIRY FOR RETURN.

[Stage Direction]
On the Orders of the Day:
Hon. W. S. FIELDING (Shelburne and Queen's):: May I call the attention of the

Government to a case in which they have, I presume, unwittingly, not complied with an Order of the House for a return? On the 19th March an Order was passed for correspondence exchanged between the Canadian and Imperial Governments, and that Order has not yet been complied with. My right hon. friend will find the Order in the Journals for the 19th March. I hope this return will be brought down.


Robert Laird Borden: What is the subject of the correspondence?


William Stevens Fielding: In a previous session,
the Government had intimated that a new channel of communication had been established between the Canadian Government and the Imperial Government. The object of the motion for a return was to ascertain if that channel had been utilized.



SUGAR EMBARGO.

[Stage Direction]
On the Orders of the Day:
Mr. J. A. ROBB (Chateauguay-Hunting-don):: I have in my hand a complaint from the representatives of some Canadian Mercantile houses that 80 carloads of sugar, shipped from the Acadia Refinery Company, of St. John, N.B., to Chicago, 111., are now held up at Ste. Rosalie Junction, near St. John's, Que., and it is rumoured that they are held up on an embargo order of this Government.


Rt. Hon. Sir GEORGE FOSTER (Minister of Trade and Commerce):: My hon. friend sent me a note in regard to this matter just a moment ago. I will make inquiry and give him an answer to-morrow. I may say, however, that neither at the present time nor for several months previously to this, have any export licenses been granted for the exportation of refined sugar from Canada to foreign parts.


William Stevens Fielding: There is probably a
mistake in the name of the sugar company. The name of the Sugar Refining Company at St. John is the Atlantic Sugar Refinery Company; the Acadia Company operates at Halifax.



LANDING OF IMMIGRANTS AT MONTREAL AND QUEBEC.

[Stage Direction]
On the Orders of the Day:
Mr. GEORGE PARENT (Quebec West):: I am informed that quite a few hundreds of immigrants are presently landing at the port of Quebec, and that owing to lack of accommodation at that port, the shipping companies, like the Canadian Pacific and

others, have been making representations to the Government that these immigrants should be allowed to land at Montreal. Is there any truth in that?


Hon. J. A. CALDER (Minister ol Immigration and Colonization):: Certain representations were made to' the Government, not recently, but a considerable time ago, to the effect that instead of landing immigrants at Quebec, further facilities should be provided at Montreal. The reason for this was not on account of lack of facilities at Quebec, because we have very good facilities there. The matter is under consideration and as yet no decision has been reached.



MEN RELEASED ON HABEAS CORPUS RE-ARRESTED.

[Stage Direction]
On the Orders of the Day:
Hon. RODOLPHE LEMIEUX (Maison-neuve and Gaspe) :: [DOT] I notice in the press a report that two young men from somewhere near Sherbrooke in Quebec applied recently for a writ of habeas corpus. They had been sentenced to twenty-five years' imprisonment by Mr. Justice Desy of Three Rivers, who happened to sit as a judge of criminal jurisdiction at Sherbrooke. The two young men made application through their counsel, Mr. Cabana, K.C., for a writ of habeas corpus before Mr. Justice Duelos, and the writ was issued by him. I notice in yesterday's press that by order of the Department of Justice at Ottawa the two young men were re-arrested Saturday. Would the Minister of Justice kindly inform the House if the facts as stated are true, and if so, the reasons why the writ of habeas corpus has thus been ignored. This is a very serious matter.


Hon. C. J. DOHERTY (Minister of Justice) :: As to the facts as stated by the hon. gentleman, I was not aware that these young men had been re-arrested.


Rodolphe Lemieux: I read it in the newspapers.


Charles Joseph Doherty: I will inquire as to
that. It is a fact that two (men who had been found guilty of a very grave crime, and who had been sentenced to a long period in the penitentiary, were some little time ago ordered to be released upon a writ of habeas corpus by a judge of the Superior Couit in the province of Quebec. Of the proceedings looking to that writ we had no notice, but I presume the Attorney General of the province was heard upon the application. The application was granted.
The matter came to our attention and it was looked into. We were advised that a judge of the Superior Court sitting on a writ of habeas corpus was without jurisdiction to order the release of prisoners duly convictr ed by a court and duly sentenced by a court of at least equal jurisdiction. When the matter was last brought to my attention the question was then under the consideration as to what steps, if any, it was open for us to take for the purpose of having that question passed upon and determined. As I. said, I was not aware that action had actually been taken, but I shall make inquiry and be in a position later to answer fully as to what has been done.



BOARD OF COMMERCE REPORT.

[Stage Direction]
On the Orders of the Day:
Mr. C. A. FOURNIER (Bellechasse):: I desire to ask whether the Board of Commerce, however disabled it may be, has made a report recently to the Government, and if so, when will it be tabled, and whether hon. members will be provided with copies.


Robert Laird Borden: A report has
been received. It is very voluminous, and will be laid on the table of the House as soon as possible. After that, we will reach a conclusion as to whether we should proceed to order that it be printed for the use of members.



NEWSPRINT.

[Stage Direction]
On the Orders of the Day:
Mr. C. G. POWER (South Quebec):: May I inquire whether there is any truth in the report, which has obtained wide circulation, to the effect that during the present week, or at all events before the end of the session, legislation will be brought down with regard to newsprint?


Robert Laird Borden: Any necessary
announcement with regard to that matter will be made in due course.



JUDGES' SALARIES IN THE PROVINCE OF QUEBEC.

[Stage Direction]
On the Orders of the Day:
Mr. JOSEPH AROHAMBAULT (Cham-bly and Vercheres):: May I inquire from
the Minister of Justice if it is the intention of the Government to bring down legislation this session for an increase in the very inadequate salaries of the judges, of the province of Quebec?,


Charles Joseph Doherty: The matter has 'had
consideration. As soon as a conclusion is reached, it will be announced to the House in due course.



CIVIL SERVICE BONUS.

[Stage Direction]
On the Orders of the Day:
Mr. J. A. C. ETHIER (Laval-Two Mountains) :: May I be permitted to call the attention of the Government to the fact that the bonus voted by this House for the Civil Service over two months ago has not yet been paid to officials of the House of Commons and of other departments. There have been complaints in this respect. I understand that some of the branches of the Public Works Department, for instance, have not received the bonus for this year. I have been informed that the officials of the Senate received their bonus two months ago, while, as I stated, the officials of the House of Commons have so far received no bonus for this year. I should like to ask . the reason for this delay, and I would urge the Government to see that all the civil servants are treated the same in this respect.


Hon. N. W. ROWELL:: Evidently there
are some members of the Civil 'Service responsible for the distribution of the bonus who are more industrious than others, judging by the situation my hon. friend has mentioned. My hon. friend will recall the fact that it was only last month that the bonus vote went through the House. I understood that all bonus cheques that had not already gone out would go out on the first of the present month, with the pay cheque for the present month. I do not know why some civil servants should not have, received their bonus cheques on the first of the present month, if they did not receive them last month, but I shall make inquiry.



LANDING OF IMMIGRANTS AT MONTREAL AND QUEBEC.

[Stage Direction]
*On the Orders of the Day:
Georges Parent: I am informed that representations have been made to the Government with a view to the landing of immigrants at the port of Montreal instead of the port of Quebec. Is it the intention of the Government to choose one port rather than the other for this purpose?


James Alexander Calder: In reply to the question of my hon. friend, which is very similar to the question which was asked

before, at present immigrants are being landed at Montreal, but the great majority are being landed at Quebec. The question of providing further facilities at Montreal has been under consideration for some time.



MINISTERS' SALARIES AND MEMBERS' INDEMNITY.

[Stage Direction]
L'ordre du jour etant appele:
M. D. A. LAFORTUNE (Jacques-Cartier): Monsieur l'Orateur, je desirerais savoir du tres honorable premier ministre sa le Gou-vernement a l'intention d'augmenter le traitement des ministres. Votre humble serviteur est d'opinion que les ministres ne se rendent pas justice-
Mr. SPEAKER:: Order. I must ask the hon. member to submit that question after giving notice in the usual way. It has no element of urgency whatsoever.
(M. D. A. LAFORTUNE: Monsieur 1'Ora-teur, je desirerais aussi savoir du tres honorable premier ministre s'il a l'intention d'augmenter le traitement des deputes et des juges. Je crois que c'est absolument necessaire et urgent.


Edgar Nelson Rhodes: This question is not of a character which can properly be submitted on the Orders of the Day. I have no objection to its being put if the Government chooses to answer.


Jacques Bureau: Answer in the affirmative.
Le Tres Honorable sir ROBERT BORDEN: La question que l'honorable depute a posee n'est pas tres urgente.
M. R. LANCTOT: Tres bien, tree bien.



WAR MEMORIAL.

[Stage Direction]
On the Orders of the Day:
William Lyon Mackenzie King: 

BUSINESS PROFITS WAR TAX ACT, 1916. AMENDMENT.

[Stage Direction]
On.motion of Sir Henry Drayton (Minister of Finance) Bill No. 157 to amend the Business Profits War Tax Act, 1916, was read the second time and the House went into committee thereon, Mr. Steele in the Chair.
On section 1-amount of tax charged.
Joseph Archambault: Do the words
"capital employed" in subsection (2) mean the original capital invested?


Sir HENRY DRAYTON:: There is no
change in the main provisions of the Act relating to capital employed. The change has reference to the rate, so that the tax, so far as the question of capital is concerned, will be levied exactly as it has been in the past,


Joseph Archambault: Has the tax been levied on the original capital invested?


Henry Lumley Drayton: The actual cash capital invested. This question is covered under section 7 of the main Act which provides that the capital employed in a business or ian incorporated company shall be the amount paid up upon its capital stock.


[Stage Direction]
Section agreed to.
On section 2-operation of Act extended for another year.
William Lyon Mackenzie King: What is the . change here?


Henry Lumley Drayton: The effect of the whole section is to extend the time for the operation of the business profits tax twelve months.


Mr. LAPOINTE:: I wish to emphasize the point I raised the other day in regard to the exemption from taxation of companies ninety per cent of whose capital is owned by a municipality or a province. This provision undoubtedly constitutes a discrimination, and notwithstanding .anything which my hon. friend may say to the contrary, its effect will be that the operations of one particular business in my own province will bring to the treasury of the country over three-quarters of a million dollars
per year, while the same business in Ontario will not contribute .a single cent to the public. I say that taxation should be the same in all parts of the country, and there is no reason why corporations or companies, a portion of whose capital is owned by a province or a municipality, should be exempt. When a province oir a .municipality enters business it should be treated in precisely the same way as an individual or a private corporation is treated. The minister says that the reason why these corporations in regard to which I complain are exempt is that they will not make any profits. Well, if that is so why put .an exemption clause in the Bill? There is a clause which exempts them frhm paying when their profit does nolt exceed a certain sum. My hon. friend says that they will not have any profit because they are not conducted for the purpose of making profits. Then why do you put an exemption in the Bill? On the other hand, privately owned companies are forbidden by a section of the original law to decrease their rates, as was suggested by an hon. member the other day. Those companies cannot decrease their rates without the leave of the minister; if the minister finds that the price they are charging is too low they can be prevented from decreasing their rates. I do not see why there should be a difference between privately owned companies and publiq concerns.


Mr. MACLEAN (South York):: I would like to say something in regard to that particular point and in regard to the operations of the organizations to which the hon. gentleman (Mr. Lapointe) has directed attention. Our organizations in Ontario are based on the idea of public service and not profit and if they have profits they distribute them amongst those who are associated with them. If the Hydro-Electric Commission of Ontario makes any profits it distributes them amongst, the municipalities toy means of a reduction in the rates charged for electricity. Because of that, there are practically no profits. They do not desire to 'build up profits tout they do seek to give a public service at cost price and if that is the cage why should they be taxed or interfered with under legislation of this kind?


Georges Parent: I have nothing to eay in answer to my hon. friend from South York (Mr. Maclean), except that if the HydroElectric Commission is what he says it is, to the extent that they call it a company instead of -a commission, I am inclined to be-

Have that that organization in Ontario would be practically a private concern. The Government of Ontario had a right to give away whatever powers they deemed it advisable to give to a particular corporation. If it is no longer the province of Ontario that is distributing electrical poweT, I see no reason why this company should not be taxed the same as any other company doing business in a similar way. The province of Quebec has also a good many companies distributing power and electrical energy. The people w'ho have unvested their money in such projects paid taxes to the Government at the rate of $740,000 last year, while in Ontario, just because the Government has created a special corporation, depending to a certain extent on the province, that company will not pay a cent into the federal exchequer. That is unfair competition. If the Government of Ontario hais seen fit to create a special corporation, that corporation should he a corporation like any other and be liable to pay taxes the same as any other. The answer to that contention is that such a corporation is not looking for profit. That is no reason in my opinion because if you take the profits and invest them in your own business again-* which private corporations are prevented from being done by law-there is no reason why a corporation like that in Ontario, having a right to do that, should Ibe exempted from taxes. The fact that in Ontario this corporation have a right to put their money back into the improvement of their property is no reason why they should be exempted from taxation. Take the capital they have put into the proposition, take whatever profit they have made since and 'then find how much they should pay into the public exchequer the same as any other private citizen or corporation.


William Findlay Maclean: The municipalities of Ontario and other portions of the Dominion have the right to use their money and their organization for the distribution, say, of water. They never seek to acquire profit in that manner. They do a large business in that way, and they have a large income. If a city owns its own water system it gives a public service but the money turn over is not profit and such an organization is not called upon to pay taxes on profits.


Ernest Lapointe: If they are not going to make any profit, what is the use of exempting them from the Excess Profits Tax? If they are making mo profit they will have no Excess profits 'tax to pay.


William Findlay Maclean: But the hon. gentleman is trying to make them pay whether they have any profit or not.


Ernest Lapointe: No, hut I do not want them to be treated in a manner different from any other corporation.


Henry Lumley Drayton: I do not know that I can usefully add very much to what I have already said on this subject. Rightly or wrongly, certain municipal and governmental activities -are looked upon as being in a different position from the activities of a private corporation, one set of activities -being carried on for gain on the one hand and the other for -service. This question ;is not -merely one between what is perhaps the largest example of that doctrine in the concrete, the Ontario HydroElectric system and private owned companies, but it is a question between private owned companies and a very great number of our municipalities throughout the whole country. Winnipeg ifor example^ has a very excellent electrical plant, it has a large turn over in connection with the supply of electrical power, it is carrying -its investment and carrying it properly out o'f its rates and it is providing for a 'sinking fund. It is carried along exactly in the same wiay as the Hydro-Electric Power Commission of Ontario. I do not know that 'it is -really necessary that -the -exemption should be put in but now that the question is .raised, it- certainly, I think, ought to stand.


Ernest Lapointe: Why?


Henry Lumley Drayton: Because I have never heard of legislation in a province taxing by right of the province the property of His Majesty as represented by the Dominion; nor have I ever heard of legislation by His -Majesty as represented 'by the Dominion taxing the property of His Majesty as represented by the province.


Georges Parent: Does the hon. gentleman not realize that the minute -the Government of Ontario, or any other government, parts with i'ts rights by handing them over to a private corporation, his argument falls to- the ground?


Henry Lumley Drayton: I would entirely agree with my hon. friend if that were the ease. But that is not the case. By no stretch of imagination could a municipality be regarded as -a private corporation or could the Hydro-Electric Power -.Commission he referred to a-s a private company.

It has absolutely none of the adjuncts of a private company.


Georges Parent: Could action be taken against the corporation itself?


Henry Lumley Drayton: No action could be taken against the Hydro-Eledtnc Power Commission except on a flat because it is recognized that it is part of the machinery of the Government of Ontario: It is not in the same position as a company. It has never been found feasible for the Crown as represented by the Dominion to tax the Crown as represented by a province or vice versa. That is a fundamental principle which I am sure will commend itself to every hon. gentleman. It is well 'that it should be made clear at once that .concerns which are not incorporated for the purpose of profit, or concerns set on foot by reason of the action of municipalities or provinces, not for the purpose of making profits, need not do any .accounting under this system. There would foe no use in doing it if they never could have profits. They ought not 'to make profits. If they make profits it is against the whole policy which is to give the cheapest land best service after providing for a sinking fund. It can hardly be said that there is any real discrimination between a company on the one hand earning dividends in excess of ten per cent, and a municipality or a government, or a governmental commission that earns no dividends at all. the matter I think, as I said before, is entirely in the hands of these people. With much deference to the representations made by the hon. member for Quebec East (Mr. Lapointe) I am still of the view that companies need not earn excessive profits unless they want to, and they are not taxed unless they do earn excessive profits. I know of no provision of the Act which prevents them from reducing rates. Perhaps my hon. friend could refer me to the section.


Ernest Lapointe: Yes, subsection 6 of sec tion 6 of. the original Act, 1916.


Henry Lumley Drayton: But that does
not do it. Perhaps I had better read the section:
Where an incorporated company conducts its business, whether under agreement or otherwise, in such manner as either directly or indirectly to benefit its shareholders or any of them or any person directly or indirectly interested in such company by selling its product or the goods and commodities in which it deals at less than the fair price which might he obtained therefor, the minister may for the purposes of this Act determine the amount which shall be deemed to be the profits of such company for any accounting period, and in
determining such amount the minister shall have regard to the fair price which, but for any agreement, arrangement or understanding might be or could have been obtained for such product, goods and commodities-
There is nothing in the world to say that these people, in the carrying on of their business, cannot reduce their costs to what the Act itself looks upon as a fair price- namely a price which will result in a gain which cannot be called excessive, a gain which will not exceed ten per cent.


William Stevens Fielding: Is the Hydro-Electric
Commission of Ontario-my hon. friend of course will know-declared by the legislation concerning it to be a body corporate or is it not?


An hon. MEMBER:: That is the point.


William Stevens Fielding: I am not considering
the question of whether or not it earns dividends or profits. If it is declared to be a corporation,' with all the .powers, privileges and responsibilities of a corporation, I think it should be taxed, If it is not a corporation, if it can only be assailed by fiat as the Minister of Finance says, I think it changes the situation. If the Hydro-Electric Commission is a body corporate it is going to stand in the same position as the Canadian National Railways Company, and in the latter case, although the Canadian National Railways Company is owned by the Government, assurances have been given to municipalities, that when the Government takes possession of the Grand Trunk, under the arrangement recently made, the right of taxation by the municipalities will remain. In that case they are going to treat the Canadian National Railways, with the consent of the Government, as a private corporation, or if you like it, a public corporation. Whether it earns dividends or profits or not does not touch the point, it seems to me; the whole thing turns on the name. What is in a name? Sometimes a good deal. If this commission is declared by the legislation of Ontario to be a corporate body politic I think it should be taxed..


Henry Lumley Drayton: The Hydro-
Electric Commission is merely a governmental commission charged with a trust in favour of the municipalities.


William Stevens Fielding: And the Canadian National Railways Company is charged with a trust by the Dominion Government.


Henry Lumley Drayton: I submit, with all due deference, that at any rate that is not the way in which the directors of ordinary companies regard themselves, whether

they be a railway or anything else. I have an idea that they are looking towards the fruits of an investment in which they are particularly interested, and that is something they never allow to escape their attention. In connection with the HydroElectric Power Commission, the real question, after all, is whose property is it. The property certainly does not belong to that commission but belongs to the Government and will become the property of the municipalities when they have paid the whole amount of the moneys which were necessary in order to create the property. The property is the property of His Majesty in the right of the province.


William Stevens Fielding: If the question is only one as to whom -the property belongs, I must again use the illustration of the Canadian National Railways. The Grand Trunk railway is now virtually the property of the Crown but inasmuch as the Government have declared by legislation <that it belongs to the Canadian National Railways Company, a corporation, the cities and towns of Canada are going to tax the railway property. So I think myself the minister cannot get back to the general question of whose property this is, because if he takes that view he will not allow any city or town m Canada to tax the Grand Trunk.


Henry Lumley Drayton: With all due deference, taxation is a matter of strict legal enactment. Ownership also is something which is determined by strict legal enactment, or contract, as the case may be. Now while it is true that the Crown may only own a share of stock in an incorporated company it is true that the company, so long as it is continued as an existing entity -owning and administering the property- may be taxed; and in the same way the principle is not offended when the Crown, instead of owning one share in a company, owns all the shares; the operations are still carried on as in right of the company. Ownership is owned by that company, and the Government are merely owners of the stock. I admit it is a technical distinction but most distinctions are technical.


Jacques Bureau: This is a restriction.


William Stevens Fielding: I repeat my question: Is or is not the Ontario Hydro-Electric Power Commission a body corporate?


Henry Lumley Drayton: That commission is specifically declared to be a body corporate-


Ernest Lapointe: Hear, hear.


Henry Lumley Drayton: -for the purpose of carrying out the trust set out in the document. I know of nothing which vests the property in them. I know of nothing -which places them in the same position as a company which would give them the right to set up a claim to the property.


Jacques Bureau: There is a special provision in the Hydro-Electric Power Commission Act of 1917 which exempts that body from taxation. Section 12 (a) says:
Notwithstanding- anything in the Assessment Act contained, land owned by and vested in the Commission shall be subject to assessment at the actual value thereof according to the average value of the land in the locality.
Here the commission are taxed for municipal purposes. The Act goes on to say:
(2) Subsection 1 shall not apply to or include buildings, machinery, works, structures, substructures, superstructures, rails, ties, poles and other property works or improvements owned, used or controlled by the commission, nor an easement in land not owned by the Commission, but all suoh buildings, machinery, works, structures, substructures, superstructures, rails, ties, poles and other property, works or improvements, owned, used or controlled by the Commission, and every such easement or right, shall continue to be exempt from assessment and taxation as heretofore.
It would appear that the land surrounding the line that-they use for transmission purposes is taxed municipally; and if the municipality has the right to tax the commission why would not the Federal Government have the right to do the same thing?


Henry Lumley Drayton: I would have thought that there is a clear distinction. My hon. friend will see, in the first instance, this body politic has absolutely no moneys of its own whatever. It gets all its moneys-here I speak subject to correction, I have not read the statute over for a long time

from the Ontario Government. Those moneys are voted to it, or else they are moneys which are raised by bonds of the municipalities with the assent of the Government, the proceeds of which go -to this commission, but of ownership, similar to the ownership of the company it has none. Its sole ownership therefore-if you like to call it ownership-is	subject to the
trust of the province, or the trust of the municipality. Now it is perfectly true that in so far as local lands which are in the possession of this commission are now taxable they were not there made specially taxable on the same theory that lands belonging to the Canadian National Railways are made taxable in the different municipalities through which they pass.

It would be unfair to these municipalities if they should get nothing out of it. For years they did get nothing out of it; they are now allowed to get something out of it. The province can make any law it likes imposing charges upon its property for the benefit of the municipality; w.e can make any law we like charging our property for the benefit of the municipality. We did so this year in connection with Ottawa. But that is a very different thing from the proposal that because a province thought fit to tax its property for the purpose of helping some of its other institutions, we for our purposes can tax provincial property.


Jacques Bureau: The Legislature has the
power that my hon. friend has mentioned. It also has the power to make itself a body corporate. When it does that it comes under the general rules applicable to all corporations. They may legislate that they will pay certain taxes on certain things, and having done so they are not exempted under the General Assessment Act of Ontario, section 12A of which provides that land owned by the company shall be assessed at its actual value, taking into consideration the value of surrounding property. Now, the Legislature of Ontario has chosen, having the power to do so, to abandon its rights as a legislature in respect to certain matters and to hand over those rights and powers to a company. If they want to finance that company or to endorse its notes, that is a different thing. If the company cannot pay its obligations the Provincial Government has to come to its rescue. But that does not do away with the fact that this commission comes under the company law of Ontario to all intents and purposes, except as regards the restrictions imposed in the statute creating the commission.


Henry Lumley Drayton: I should have
thought it was quite clear that this commission could not possibly come within the provisions of the Joint Stock Companies' Act of Ontario. I do not think that a company which is without capital would be recognized as such by any of our companies Acts. Here there is absolutely no capital, absolutely no issue of stock.


Ernest Lapointe: We are not discussing
the Hydro-Electric of Ontario exclusively. 'My hon. friend says that there is no issue of stock in that instance. Well, section 5 of the Business Profits War Tax Act exempts the business of any company, commission or association not less than ninety per cent of the stock or capital of which is owned by a province or a municipality. So
there is certainly some stock there, because it is stated to be owned by a municipality or a province. Now, my hon. friend says that the fact that a portion of the stock is owned by the Crown or by the province should prevent us from taxing.


Henry Lumley Drayton: Oh no, it does not unless we say so.


Ernest Lapointe: Why should the Bill
establish an exemption where ninety per cent of the stock or capital is owned by a province or municipality? If only eighty-five per cent of the stock is so owned, the tax provided for by this legislation cannot be applied. Surely my hon. friend will admit that when a company is specially incorporated for the purpose of carrying on a particular trade, whatever be the proportion of the stock owned by a province or municipality, that company is still an incorporated body absolutely independent from and different from the province or the Crown.


Henry Lumley Drayton: I agree.


Ernest Lapointe: As to the other argument of my hon. friend that this does not constitute any discrimination, I wish to point out that section 6 of the Act provides as follows:
No deductions from the gross profits for depreciation or for any expenditure of a capital nature for renewals, or for the development of a business, or otherwise in respect of the business, shall be allowed, except such amount as appears to the minister to be reasonable and to be properly attributable to the accounting period, and the minister when determining the profits derived from mining shall make an allowance for the exhaustion of the mines.
As to the other section read by my hon. friend, I fail to interpret it in the same way that he does, The publicly owned company, as stated by my hon. friend from South York (Mr. W. F. Maclean) instead of making profits, reduces the rates or employs the profits in the development of its business, while a privately owned company cannot do that without the approval of the minister. So the consumers are suffering,

and that is the point I emphasize. The consumers of a certain article in one part of the country are deprived of a benefit which consumers of a similar article in another part of the country enjoy. My second point is this: after all, it does not speak very favourably for the publicly owned companies that the federal treasury should get three-quarters of a million dollars out of the carrying on by privately owned companies of a certain trade in the province of Quebec, whereas in Ontario corporations which are carrying on the same

business do not pay one cent to the federal treasury. On its face that is unfair.


William Findlay Maclean: While I am not a lawyer and cannot go into the intricacies of this discussion, I may point out that there is a great movement in favour of public ownership. Public ownership is designed to give service, not to afford profit, the Ontario Hydro-Electric Commission have taken over a number of private companies. Take the case of the Ontario Power Company which, before it was taken over by the Hydro-Electric, would have been liable to pay under this law a contribution in the shape of taxes. The remedy for my hon. friend's friends in Quebec, if there be discrimination, lies in the province of Quebec following the example of the province of Ontario. I make the prediction that within the next ten years the province of Quebec will own its power just as Ontario does, and we intend to acquire more power plants and to develop and administer them for the purpose, not of making a profit but of giving service, and if in giving that service there be any surplus, of devoting that surplus to a reduction of rates. Each section of the community that undertakes to consecrate its capital and efforts towards giving a public service at cost, is justified in doing that, and it ought to be encouraged. That is largely the direction in which the world is moving, namely, to turn public services over to the State or to the municipalities.


Ernest Lapointe: And escape taxation.


William Findlay Maclean: Perhaps
to escape taxation; but to do something better, to give service at actual cost, to eliminate profits. The hon. gentleman wants to change that tendency which has manifested itself in Ontario in a number of municipalities and which it is perfectly right for those municipalities to follow. If somebody be hurt in the matter or if there be any discrimination, the fault does not lie against those municipalities or public organizations that undertake to give this public service. It is open to Quebec to do the same thing.


Jacques Bureau: We are doing better and we do not want to go back.


William Findlay Maclean: You now are trying to lay down a law. If the people, in their organization as a municipality, or as an association of, imunicipalities, as is the case in Ontario, undertake to give this service without profit, in order to reduce the cost and to, give the entire profit to the

people, they should not be subjected to a tax of this kind. If there be a discrimination,- it is not their fault.


James Alexander Robb: The debate seems to be
drifting into- a question between public ownership and private ownership, and listening to the debate, I think that had the Government carried out the policy enunciated by the predecessor of the present Minister of Finance, there would be no room for such a discussion to-day. My recollection is that in presenting the business profits tax last session, the then Minister of Finance (Sir Thomas White) gave the House and the -country clearly to understand that the business profits tax would not be renewed this year, but that it would [DOT] be replaced by an income tax. An income tax is absolutely sound; every person pays; but a business profits tax does not work out to the advantage of this -country. Only last week, w-e listened to the Minister of Finance (Sir Henry Drayton) delivering his Budget Speech, in which he -clearly intimated that activity and production had been lessened during the past year. Why? Because the money that would have been used to extend business and enlarge industries was gathered in by the Government, and there was no incentive for industries to go on and extend their business. That is one reason why to-day the Minister of Finance is compelled to acknowledge to the 'House and to the -country that there has been a lessened activity throughout Canada during the past year. The best *way to avoid this controversy as between public ownership and private ownership is to get back to the promises made by the predecessor of the Minister of Finance and to do away with this business profits tax which is an injury to our industries and to Canada. Capital is very -timid, and I ask the Minister of Finance how many new industries have been established throughout Canada during the past two or three years; how many new industries are being established to-day and how many industries are being extended to meet the ever increasing trade that we boast of?


Jacques Bureau: You must except Three
Rivers.


James Alexander Robb: There are practically none,
and there is no justification for the argument advanced by our friends from Ontario who -oppose the suggestion of my hon. friend (Mr. Lapointe). If the publicly owned and operated utilities of Ontario are not making profits, there will be nothing

to pay. All we ask is that you put them on the same basis as similar industries in the other provinces. But I go>
further and suggest to the Minister of Finance that at this session he should make a reassuring statement to the people of Canada that he is going to do away with a tax that is preventing the formation of new industries anid the extension of old ones. The sooner that statement is made, the better for Canada, if we intend to continue developing our industries so as to meet the increasing trade that is open to the world.


Jacques Bureau: After the statement made by my hon. friend (Mr. W. F. Maclean) about the advantages of the system that obtains in Ontario and discriminates against the other provinces, I do not want my hon. friend to think that we are specially pleading for Quebec. If, by any process of law, you are going to exempt Ontario from the payment of taxation, somebody else has to make up the amount. Supposing under the capitalization of the Hydro-Eleetrie Commission of Ontario, they would have to pay a tax of half a million dollars, if they are exempted from paying it, that sum has to be found somewhere else. Ii hon. members want to speak about unfairness, there is another thing that is unfair. This commission, posing as a provincial institution, goes outside of its province and induces manufacturers to come in, with what result? I have here the report of the Canada Cement Company for the 31st December, 1919. This is what they say:
As advised in our last Annual Report, we were unable in 1918, to operate your No. 8 plant, situated at Port Colborne, on account of the failure of the power company to supply power. Since March, 1919, The Ontario power Company, which is owned by the HydroElectric Power Commission of Ontario, has resumed the supply of power to this plant, but we regret the power company is not delivering power in accordance with the terms of its contract, and the service given is so poor that the output of your No. 8 mill is only about 60% of normal, and therefore, its operation is not profitable. This matter has been repeatedly taken up with the power company, but, as yet, the service has not been improved. Until the power company improves the service and supplies power in accordance with the terms of its contract, we cannot look forward to the profitable operation of this mill.
If my hon. friend wants some more examples of the great success- the HydroElectric Commission' have had, let me tell him that a Mr. Cousins went to England, where he advocated the -great superiority of the Hydro-Electric system of Ontario. He returned to -Canada and he wanted the power. What answer did he receive? I
have here a clipping from an Ontario paper, The Times, which reads:
A. M. Russell, President of Baldwin's Canadian Steel Corporation, announces that orders have been issued to Iloge-r Miller and Son, who have a million dollar plant construction contract, to cease operations as the result of failure to secure a contract from the Hydro-Electric Commission guaranteeing an adequate supply of power to operate their plant.


Mr. BURNHAM:: What has this to do witt the matter under discussion?


Jacques Bureau: This is to show that, from start to finish, the business works a -disadvantage and a hardship on the otheT provinces, and that the law ought to he amended so that these companies should pay a tax on their capitalization, the same as any ordinary company.


John Hampden Burnham: The only subject now before the committee is an excess profits tax. If we are going to fight -out the question of private versus public ownership, let us take a day off an-d do that.


Jacques Bureau: No, we had better go outside and fight it out. We are talking generally about the tax on corporations. My hon. friend was telling us that Quebec ought to follow the example of Ontario. I say: No; as long as -privately-owned companies can give us as good service and perhaps better than you are getting, because our companies are never short of power, and we get it .at a lower rate than you are paying, why should you want to get the Crown mixed up in this business -in order to foTego taxation? Where is -the Government going to get its revenue if every public utility is going to be put under the control of the State? Supposing the Canadian Pacific were owned by the State, where would their tax of $6,000,000 go to? The Government would not get it, and my friends and -myself and the masses of the people throughout the country would have to make up the amount.


John Hampden Burnham: Does not the hon. gentleman prove too much when he says that the people of Quebec by reason of reduced rates from private companies get power at less cost-that -is one end-and then get a profit-that is the other end? $100,000, say, for the decreased rate, and $100,000 for excess profits; that makes $200,000. In Ontario it is not the same at all.


Jacques Bureau: You get no end because in Quebec to get a cheap rate and a profit you must have good management and economy. I have nothing to say against the Hydro Electric. They can run their busi-
*52.36

ness as long as I have not got to pay for it, hut the moment they are exempt I have to pay, and I say it is not right. You should not expect the other provinces to pay for the Hydro Electric of Ontario.


Rodolphe Lemieux: We have lower rates in Montreal than in Toronto.


Mr. SUTHERLAND:: I am sure the people of Ontario will appreciate the apparent Solicitude shown in their behalf by the hon. member for Quebec East and the hon. member for Three Rivers. Those who recall the initiation of the Hydro Electric Power Commission by the government of Ontario will recall the many arguments that were then advanced similar to those that have been made here this afternoon. It is rather remarkable that while the hon. member for Quebec East and the hon. member for Three Rivers apparently started out with the same objective, the hon. member for Quebec East is considerably in advance of the hon. member for Three Rivers, in that he admits that the consumers are going to reap the advantage in Ontario, while the hon. member for Three Rivers claims they are going to suffer by reason of public ownership. I can hardly reconcile those two views. My hon. friends need not get so worked up; Hydro Electric in Ontario cannot become liable for taxation under the Bill before the House, because there are no pir'oifits to be taxed. Consequently, it is an absolute waste of time to discuss this matter this afternoon. I think the suggestion of the hon. member for Peterborough was a good one. If hon. gentlemen opposite cannot contain themselves hut have to boil over on every occasion where Ontario is in advance of Quebec. I think if we had a day off to discuss where favours are shown we could show that Ontario has contributed very generously towards enterprises in the province oif Quebec. Railways, for instance, experimental farms, and some other things I might mention. The hon. member for Huntingdon pointed out that capital is nervous in this country. Oh, how much we heard about the nervousness of capital eighteen years ago when this scheme was first launched in the province of Ontario. I can tell my hon. friends that the people of Ontario are pretty well satisfied with the Hydro Electric. It is not perfect by any means, but they are endeavouring to carry out the project, and it has proven to be a great asset to this province.
The hon. member for Three Rivers referred to the lack of power for certain companies-the cement company at Port C'ol-

borne, and Roger Miller and Son Company. It is true they are short of power. Why? Because before the Hydro-Electric Commission was organized, private corporations secured control of nearly all the power that was available at Niagara Falls. There was embodied in the contracts which were made by the Government of the day with these private companies a provision that the Government of Ontario could not enter into competition with them in the development of power at Niagara Falls. These companies have been exporting, as they had a right to do, under their contracts, thousands of horse-power to the United States, and the people of Ontario suffer as a result of private ownership in this province. I believe that the Hydro-Electric has been the greatest benefit the province of Ontario has ever experienced, and notwithstanding the arguments that have been advanced by those w'ho are opposed to public ownership of public utilities in this country it is going to continue to be a success, and a much greater success in the future than in the past. By reason of this provision that was inserted in the contracts with private companies the Ontario Government has been forced to develop power at Chippewa Falls and other places at an expenditure of many millions of dollars.
Reference has been made to the municipalities taxing the commission on the land. These lands were expropriated from the municipalities, the municipalities under the British North America Act have power to levy taxes for municipal purposes. The municipalities were originally the owners of these lands and they are simply continuing to assess the properties that have been expropriated. The Government of Ontario are simply furnishing and expending the money and charging it up to the various municipalities concerned in the undertaking, which so far has been mainly transmitting power to municipalities. I cannot see any object in. Continuing this discussion here this afternoon, unless it be, as I believe it is, an attempt by certain hon. gentlemen opposite 'to discredit public ownership in this country. They do not want to give it a fair chance. From the outset public ownership has encountered stiffer opposition possibly than any other development that has ever been attempted in the interests of the people. I admit that HydroElectric is not perfect; nothing is perfect; you cannot expect perfection. If the hon. member 'for Three Rivers and the hon. member for Quebec East, who, I understand, had this matter up at a previous

sitting of the House, are determined to go on and discuss the pros and cons of public ownership in this country, if they are going to encroach on the good nature of the House, because their attitude cannot be considered otherwise-


Ernest Lapointe: You are speaking much longer than I did.


Donald Sutherland: -we might just as well understand the situation, because it is certainly not the Bill before the House that has been occupying so much of their time.


Ernest Lapointe: You are occupying the time; I am not.


Donald Sutherland: You started it and have taken your time.


James Alexander Robb: Is the minister prepared to
make a statement as to the continuation of this tax?


Henry Lumley Drayton: I endeavoured to make myself pretty plain on this question. The taxation was a war taxation. It was a taxation whose incidence was not capable of being applied without a good deal of unfairness. That has been developed in the debate in committee the other day, and again to-day. The tax was a rough and ready way of getting revenue at a time when rough and ready methods were necessary, and, after all, it did bring into the treasury a large amount of the profits which were unnecessarily large. It is a tax which you cannot drop at the moment, but it ought to be dropped just as soon as possible. If hon. members are helpful in seeing that measure go through that will get the Government lots of revenue, there will be not much danger of the tax being continued.


James Alexander Robb: May I suggest to the minister that we on this side will willingly assist him in measures that will tend towards economy instead of the extravagance we have had during the past few years.


Mr. VIEN:: Might I suggest that the minister drop the idea, for instance, of erecting expensive buildings for the Mounted Police at Ottawa at a cost of $500,000, to keep 225 m~unted policemen in Ottawa just for the purpose of parading our streets. I think there is ample room there for economy.


The CHAIRMAN:: The hon. member is
out of order in discussing that question at this stage.


[Stage Direction]
Section agreed to.
On section 3-capital in case of merger of companies:	v
Mr. McKENZIE:: Will the minister explain this section?


Henry Lumley Drayton: It means that in this day of mergers we are endeavouring to . see that companies shall not escape the taxation which ought to be paid by reason of the introduction of water into the capital of merged companies. We are endeavouring to see that the taxation which ought to be paid will not escape exaction by reason of the introduction of water into the capital of the merged companies. In other words, when company A is incorporated into company B, the capital is not increased by that merger beyond the addition of the two capitals.


James Alexander Robb: This section refers to two or more incorporated companies merged or consolidated at any time after the first of January, 1916. Does the minister intend this to be retroactive, and will he collect additional taxes from that time?


Henry Lumley Drayton: Not at all. It simply carries out what we have done; we think every one should be treated in the same way.
Bill reported, read the third time and passed.



INCOME WAR TAX ACT, 1917, AMENDMENT.

[Stage Direction]
Sir HENRY DRAYTON (Minister of Finance) moved the second reading of Bill No. 158 to amend the Income War Tax Act, 1917.
Mr. DEVLIN:: Explain.


Henry Lumley Drayton: The present Bill carries into effect the taxation changes as to incomes as proposed by the Budget Speech and as covered by the resolutions that have been passed, with certain minor amendments which I shall refer to as they are reached.


[Stage Direction]
Motion agreed to, Bill read the second time and the House went into committee thereon, Mr. Steele in the Chair.
On section 1-dividends.
Rodolphe Lemieux: May I remind my hon. fuend of the remarks made the other day by the ex-Minister of Labour (Mr. Croth-ers) ? The Income Tax Act is practically incomprehensible by reason of its many amendments, and I would suggest to my hon. friend that this is an opportune mo-' ment for him to consolidate the various provisions of the Act.


Henry Lumley Drayton: Next year, I think, will be the proper time to consolidate them. The Act in England has been amend-

ed from time to tiriie; it is amended' every year. I think we may consolidate the different provisions of our Act next year.


William Lyon Mackenzie King: Will the minister explain the effect of this amendment?


Henry Lumley Drayton: In the administration of this tax we have always treated stock dividends as income, exactly as if money were paid in actual cash. Where companies do not pay dividends but issue stock, which is really a bonus, to their shareholders the stock dividend is treated the same as money.' The Finance Department of the United States has always treated stock dividends in the same way, but since they adopted that principle the Supreme Court of the United States has declared it bad law and taxes paid on stock dividends have had to be returned. We have, always treated stock dividends as taxable and we shall continue to do so, but it is considered better, so far as we are concerned, that the matter should be made free from all doubt by the inclusion of the words:
-"dividends" shall include stock dividends.


Georges Parent: What will be the basis of taxation on stock which is issued at 100 but which when put on the market is sold at 50?


Henry Lumley Drayton: The justification of the dividend is the distribution of surplus. The question is, how much was that surplus reduced by issue of the dividend? To .the extent that you take money out of surplus account, whether by payment of dividend or through the issuing of stock, you lift it from one column and put it into the other and to that extent you are taxed.


Georges Parent: Suppose a company issues to its shareholders stock which is afterwards quoted on the market at 50. Will the shareholder be taxed on the basis of 100, the value of the stock when he received it, or on the basis of the market quotation?


Henry Lumley Drayton: The price has nothing to do with it. The question of what is paid outside has nothing to do with it. It is a question of the change in the company's surplus and the percentage by which that particular shareholder benefits by that change.


Georges Parent: We are now discussing the income war tax? '


Henry Lumley Drayton: Yes.


Georges Parent: Is that applicable to a company or to an individual?


Henry Lumley Drayton: It is applicable to a company in so far as it is a direct tax to the extent of ten per cent.


Mr. CURRIE:: There is undoubtedly a misunderstanding in connection with this matter and we might as well clear it up. We will take the case of a company that has a large surplus. The surplus of that company is not taxable and it may, and invariably is, invested in plant, machinery and stock. If the company pays a stock dividend it reduces that surplus by so/ much and issues stock against it. The company has got its surplus capital invested in additional plant and machinery and it has issued stock against that. That is quite clear; anybody can follow that. In the United States they undertook to tax these stock dividends that had been issued by large corporations. The surplus is taken and re-invested and capital stock is issued against it. That is exactly the procedure that an ordinary individual follows if he increases the capacity of his mill. He takes his surplus earnlings, makes an addition to his factory and puts in more machinery. The United States Government undertook to tax stock dividends. The question was argued before the Supreme Court and the court held that this was surplus of the company and that although stock was issued against it, it was not taxable. That is the condition of affairs in the United States. This Government wants to see whether twe can tax further than they do in the United States. They are not going to leave Canadian companies in the same position as American companies. Of course we want a lot of American companies to come in here and develop our resources and this will be a very great inducement for them to come in. I do not think it is good policy to say that stock dividends are taxable. As a matter of law that was argued in the United States and the Supreme Court decided against that policy. Regardless of what the minister tells the House that is a fact. It is .a question for the House to consider whether we are prepared to go further than the United States have gone. I think the more gracious procedure for this Government to follow would be to accept the American precedent and declare that stock dividends shall not be taxable. I think hon. gentlemen understand the point. The surplus capital is invested in plant and machinery and stock is issued against that capital. That becomes the property of the stock-

holders of the undertaking and it gives them that amount of additional capital.
Mr. DuTREMBLAY:	Do I understand
that depreciation will be taxed by this new clause?


Henry Lumley Drayton: Depreciation
cannot be distributed if it is properly charged.


Thomas Vien: May I draw the attention of the minister to the construction which may be put on those words "stock dividends"? The minister has given us, very properly, the policy of the department which is to tax the actual money which is taken and distributed but which instead of being distributed to the shareholders goes to the treasury of the company and stock is issued in lieu thereof. That is the policy of the department but the law does not say that. The law does not say that t'he tax is due on the face value of the shares given in dividends or ainy money which is actually taken from the treasury ias liquid assets and put back into another account in the books of the company. There may be a misunderstanding as to the interpretation of the law. The minister has given the department's construction of the law but the law will be submitted to the interpretation of the tribunals and it is possible that they may put upon the terms of the law a different construction and may take the face value of the stock as the amount of dividends distributed instead of the actual amount of money which, instead of being distributed as a cash dividend has been put back under a different heading in the books of the company, shares for that capital investment being issued and distributed in lieu thereof. I think the wording of this provision might be improved.


Mr. CHAPLIN:: I would like to .ask how this clause would operate if the dividend shares paid happened to be shares of no par value such as are being issued in the United States very largely and likely in this country also.


Henry Lumley Drayton: I do not think there will be very much trouble in that regard. What is done is this: You must have a surplus in a properly managed company, in order to enable you to have a stock dividend. The theory of a stock dividend is that a company, having money or assets in its hands which it would not desire to distribute to the shareholders but would require to keep in its own possession, issues in place of that money or cash a stock divi-206
dend. It would miake in practice no difference whether you gave dividends or gave specific shares. The amount that is realized, or that is taxable, is the amount of the surplus which ceases tot be the property of the company as a company and becomes the property of the shareholders as the .result of the issue of that new stock.


Mr. McCURDY:: I would like to ;ask if these surpluses, to which allusion is made, and against which additional stock is issued, have not .already paid a tax in the form of the special tax on corporations? As I understand, a company pays the corporation tax on its earnings during the year and if it achieves a surplus, that surplus has already paid .a tax in the form Of the corporation tax.
M.r. NESBITT: As I understand it, stock dividends lare treated, when received by individual shareholders as cash dividends, in calculating the income of an individual shareholder?	.


Henry Lumley Drayton: Yes.


Mr. NESBITT:: It therefore increases the issued stock of the corporation.


John Allister Currie: I would like to hear from the minister whether he proposes to follow the American practice or go them one better.


William Stevens Fielding: Do not talk about "trade with the Yankees."


Henry Lumley Drayton: What is proposed is to continue what we have done and to make no difference between the earnings which are distributed as cash dividends on the one hand and the earnings which are distributed as stock dividends on the other. In so far as the American situation is concerned it was obvious, of course, that they would do just exactly what we have been doing and as a matter of fact-although their Supreme 'Court, as I stated in opening, said that the Act was unconstitutional, -legislation, as I am at present advised, is now pending which will get away from the defects of the former Act and allow the tax to be levied.


Thomas Vien: What I am afraid of, Mr. Chairman, is that if a question should go to the courts the courts may take as a basis of the taxation, not the actual cash which is disposed of by the company but the face value of the stock issued in dividends. There is nothing in the Act which says that the actual basis of the Act shall be the cash



so distributed. The cash is not distributed, I understand-


Henry Lumley Drayton: That is all that could be taken, the hon. gentleman will see.


Thomas Vien: No.
iSdr HENRY DRAYTON: It is only what the company gives up to the shareholder that could be taxed.


Thomas Vien: No, because you say that the tax shall apply to stock dividends. If you issue stock at the par value cuf twenty-five, for instance, you can tax on the face value of the stock issued, and you are still within the application of the law. There is nothing stated to the effect that it is the cash which is the basis of the dividends distributed which is going to be assessed.


Edward Walter Nesbitt: I think that if the minister will say that the stock dividend is supposed to be distributed on the par value that will meet my hon. friend's point.


Thomas Vien: Rut supposing there is no
par value mentioned? There are in Canada some provinces-the province of Quebec among the number-which authorize the issue by companies of stock with no par value, and there is no par value attributed to the shares. Here again is shown the double interpretation which may be given to this Act. 'Suppose that these shares issued, taken at their par value, are at 40, and that the cash which represents these shares is not of the same amount. Then a double construction will be possible. It will be possible either to tax the shares at their par value, or to tax the money which represents the shares that have been issued. I do not know whether I have made my argument clear.


Henry Lumley Drayton: I cannot quite
follow my hon. friend. There is no thought here of taxing stock as stock. We are not taxing stock as stock; all we are doing is to say that a company cannot cheat the revenue by paying stock dividinds instead of cash dividends-that is all we are doing. There is no taxation on a share as a share; that is where my hon. friend mistakes the point. This is merely enlarging the definition of income to say that to the extent that expenditure has been plussed by bringing in in that one year-and only in that one year -stock dividends paid out of profits by the companies that it shall be considered as income; and the amount of that income-just in the same way as the amount oif the cash dividends-must be the amount by 
which the company has depleted its surplus or other cash reserves.


James Alexander Robb: While I do not for a moment retreat from the position I took a while ago that nothing should be done to tax business and prevent its expansion, it seems to me that the minister here is on sound ground when he is placing incorporated companies on exactly the same basis as partnerships. It is unfair to partnerships that they should be taxed up to the limit and that incorporated companies should be allowed to escape in respect of stock dividends.


Rodolphe Lemieux: I would like to direct
the attention of the minister to another way of escaping the payment of income tax. I have noticed that of late-to be correct,, ever since this legislation has been in force, -huge advertisements, advertisements of inordinate size have been published in the newspapers, especially in the automobile world. Evidently these companies have been doing an immense business during the war and since, and they are spending on advertisements profits which ought to be taxed by my hon. friend.


John Allister Currie: They are American companies.


Rodolphe Lemieux: And Canadian companies too. This is a way of evading the payment of taxation, and I call upon my hon. friend the minister to reach these companies.


[Stage Direction]
Section agreed to.
On section 2-determination of deficits and losses:
Edward Walter Nesbitt: Will the minister explain what is the purpose of this amendment? The amendment itself is there but not the clause which is proposed to be amended.


Henry Lumley Drayton: There are certain deductions which are allowed to be' made from income, and the particular clause which is amended is clause (f) of Section 2 of the Act of 1919. That is to say, supposing a lawyer, making $10,000 a year, goes into some side venture and loses $2,000 he cannot deduct that $2,000 from his regular income.


Thomas Vien: He cannot?


Henry Lumley Drayton: No, he cannot. In order to make it clear so that there can be no doubt as to what is or is not a debt or loss, having regard to that main business, it is proposed to add this section:

-and the minister shall have power to determine what deficits or losses sustained in transactions entered into for profit are connected with the chief business, trade, profession or occupation of the taxpayer, and his decision shall be final and conclusive.
In the previous legislation the principle is laid down. Here the machinery is provided for seeing that the principle is lived up to.


John Allister Currie: In other words, it means that when a man has two or three lines of business and earns an income from one and loses more than he makes in another, he does not get any reduction on the losses that he suffers. That is exactly what the provision means and I do not think it is fair. Suppose a man is interested in two lines of business; he makes on one and loses on the other. He pays income tax in respect of the business which yields him a profit, but for the loss that he incurs in the carrying on of the other business he gets no allowance.


Edward Walter Nesbitt: If a man makes a profit in one business and incurs a loss in another, it is probable that his income will be nil, and if he has no income he should not be taxed. It is immaterial what he makes it out of so long as he pays the tax according to his income.


Henry Lumley Drayton: Take the case
of a man who is interested in three different manufacturing companies. His main business is manufacturing, and he would be taxed on his net income from those three companies.


Mr. ROSS:: Suppose a professional man has stock in two lines* of manufacture, making a profit in one and losing in the other. Would he 'be taxed in respect of the business which yielded him a profit, or would the whole thing be taken together?


Henry Lumley Drayton: There, of course, it would be different; that is where the amendment would come in. The question would be whether he was a professional man or a manufacturer. It would seem to me that in the case mentioned he would* be a professional man having stock in these companies. If there was a loss in these companies, of course he would get no dividends, but on the other hand he would not be allowed to charge up against his professional income, income derived from the carrying on of his main business, losses incurred in that venture he took in the manu-facutring business.


James Hamilton Ross: I suppose it would depend on what decision was arrived at as to what was his chief business?
206*


Henry Lumley Drayton: That would* be the point to be determined.


William Stevens Fielding: Is it important to draw a distinction between one business and another? It is not a crime for a professional man to put some money into a manufacturing business; I do not see why he should be obliged to declare which is his chief business. Take the case of a medical man who engages in the manufacture of medicine, is he a professional man or a manufacturer? I do not see what difference it makes to the minister how the income is derived. If a man gets the income, he should be taxed; if he does not, I do not see how you are going to tax him.


Henry Lumley Drayton: I agree in large part with my hon. friend. But the real issue is not the question of manufacturing on the one side and professional work on the other. The real issue is this: Once a man actually gets an income from his main occupation or source of revenue he should be taxed, and he should not be allowed to subtract from that main income losses which he runs into in other directions. Let me illustrate. In all our large cities, particularly in Toronto, there are a lot of agriculturists, if I may use the word, as distinguished from farmers. I refer to men who make their money in the city, but who have farms just outside the city in connection with which they lose money. I have known such men to contend that while the income from their profession or from the carrying on of their business was $25,000 a year, it was unfair to tax them on that 'basis because they were losing $10,000 to $15,000 a year in the running of farms a few miles out of the city. It is to prevent that sort of thing that the amendment is introduced. That man really is not a farmer. He has his main net income, and if he chooses to spend it in carrying on this outside activity, he is in the same position as the man who spends it on automobiles or anything of that kind.


William Stevens Fielding: These cases cannot be very numerous. I am inclined to think that if a man has made money in his profession and sees fit to carry on farming operations as a hobby, he cannot lose a great deal in that connection without doing some good to the community. If my hon. friend makes a fortune in his capacity as Minister of Finance, which he is pretty certain to do, and wants to invest some of it in a farm,
I am not sure that we should penalize him for doing so. If it is a fad, it is a worthy fad, one which makes for many good things for our country. But the point is this: At

the end of a year you ask a man how much his income was from all sources. If he has not the income, how are you going to make him pay? If he has a professional income of $10,000 and has lost $15,000 in the operation of a farm he is just $5,000 in debt to some one; where is he going to get the money to pay the tax? After all, the rough and ready way of putting it is this: Has a man the income? If he has, let him pay the tax; if he has not, he cannot pay the tax. It is not to he assumed that a man goes into a business on the side merely for amusement; he goes into it for legitimate purposes, and if he loses money, I think it is one of the laws of trade that he should not he penalized for it. But you cannot make a man pay if he has not the money.


Henry Lumley Drayton: Income under our Income Tax Act is not net income; it is income before any charge is made against it, and (the effect of what we are doing here is simply to carry that principle out in its general application, not only to the things that you may choose to do with, perhaps, no particular object in view, but to the things that you have to do or desire to do for a very particular purpose. It is true that the man with an income of $10,000 a year has to maintain a household and supply his family with the necessaries of life, and so on. He has a lot of charges to make against that income; probably he even has no net income. Now, we are saying that these essential expenditures will stand in exactly the same position as an expenditure of the kind that he need not go into; that a loss in .connection with another activity than that from which he derives his main income cannot be deducted from that income any more than can his other unescapable expenditures.


Mr. BELAND:: This brings us a little nearer to the question of the taxing of the indemnity of members of the House. I understand that amounts expended in the earning of an income may properly be charged against that income. Let us suppose (that a member of this House has a total income of $2,500 a year, which is the indemnity, and that in order to earn this indemnity he spends $2,000 a year,-all in connection with the fulfilment of his public duties ias a member o'f Parliament. Is not this expenditure properly chargeable against (the total indemnity, just as expenditure ordinarily incurred in the earning of itocome is chargeable against .that income for the purposes of the tax? I wonder if the minister sees the point I am making.


Henry Lumley Drayton: I have it exactly, *and as a matter of fairness I entirely agree with my hon. friend.


An hon. MEMBER:: Then why don't you do it?


Henry Lumley Drayton: Well, I miay do it. In the first instance, I should have thought is ,was very debatable whether members of Parliament should be taxed or not on. 'their indemnity, because it is not supposed to be an income, it is supposed to be an indemnity; but Parliament itself decided that if wanted to be taxed. Apiparenty, members of Parliament, with wonderful unanimity, determined that they would like to be taxed.


Henri Sévérin Béland: Not at all. I may remind the minister that this was a straight declaration made by his predecessor without anybody calling for it.


Jacques Bureau: I asked to be exempted.


Edward Walter Nesbitt: I brought this matter up the first time the income tax was introduced, and the minister's predecessor said, just as my hon. friend1 has said, that he thought that, properly speaking, the indemnity should not be taxed. But it was taxed, and at that time I put up a fight with the department that if we were to call this indemnity an income, we should be allowed our necessary expenditures in earning that income. The next year the former Minister of Finance, as the hon. member for Beauce (Mr. Beiland) says, deliberately put in the Act a clause that we should pay on the full indemnity without any allowance. As an individual is allowed to deduct, not personal expenses, but office expenses incurred in earning an income, members of Parliament have an equal right to be allowed to deduct expenses incurred in earning what is called our sessional indemnity. I quite agree that if that were done, there would, in many cases, be no income to be taxed.


Ernest Lapointe: We would have a claim against the State.


Edward Walter Nesbitt: My hon. friend (Mr. Lapointe) says that we would have a claim against the State. But either the indemnity ought to be exempt from taxation or we ought to be allowed to deduct necessary expenses in earning the income. It was only because of the delicacy of the matter on the part of hon. members that it was not opposed at the time. It was a mistake that it was not opposed.


Henri Sévérin Béland: I do not -want to appear before the committee as claiming that that part of the indemnity which is net income should not be taxed, but I claim that whatever expenditure is incurred in connection with the fulfilment of our public duties should toe charged against the total indemnity-


Jacques Bureau: Including election expenses.


Henri Sévérin Béland: -and in that case, I am sure the minister's department would not get very much money out of the members.


Henry Lumley Drayton: Does the hon. gentleman think that contributions for election expenses or anything of that kind should be deducted?


Jacques Bureau: We do not expend anything for that.


Henry Lumley Drayton: I think the
proper thing would be that a fair per diem allowance, which would represent the expenses of a member while in Ottawa and while the House is in session, should be deducted before the amount is assessed.


Some hon. MEMBERS:: Hear, hear. *


Henry Lumley Drayton: Perhaps that is something which we might regard as a matter of administration. As the Bill is a fairly long one I do not suppose that we shall finish it to-day, and the matter will not be lost sight of.


Jacques Bureau: Could not some means be devised of collecting income tax from people who are not actually resident for twelve months in Canada?


Henry Lumley Drayton: That matter is dealt with later on.


Mr. STEIN:: Does not the minister think it is too drastic to make the decision of the minister final and conclusive? If ahy difficulty arises between the department and1 the ratepayer, the matter should be submitted to the Exchequer Court of Canada, which is a court provided expressly for the purpose of arbitrating between the Crown and its subjects.


[Stage Direction]
Section agreed to.
On section 4-income from an estate or accumulating in trust:
Edward Walter Nesbitt: If a man is a beneficiary and certain moneys accrue in a certain year and they are not paid in that year, why should they be taxable in that year? Supposing I am an executor for an estate, and certain moneys that should be paid into the estate during a certain calendar year, are not paid in during that year but are paid in the next year, if they are taxable in the previous year, a mix-up will occur in the accounting of the estate.


Henry Lumley Drayton: It is thought- and this is the result of the experience of the department-that it is a great deal better for accretions to be taxed regularly; that you should not have delayed taxes, because when taxes are delayed, too much must be paid all at once. It is really in the interest of the beneficiary himself, that when he cannot draw his income, the proper charges against that income which, after all, is actually earned-and what we should get is a tax on money when earned, whether distributed or not-should be paid.


Edward Walter Nesbitt: He might not get the money at all. Very frequently we do not get money that properly should be paid into an estate.


Henry Lumley Drayton: In that case, the tax would not have to toe paid. That would not toe income, because it would not be received.


Edward Walter Nesbitt: The clause reads that if the income accrues in that term, the tax must be paid. Such an exaction is an injustice.


Mr. PEDLOW:: I should like to refer to the returns made by members of Parliament. Many members of Parliament who are in business take stock each year on the 31st of January or some time during that month. They are expected by the department, I understand, to include their sessional indemnity in the return for the accounting period. For instance; if the accounting period for the year- 1920 is arrived at in the month of January of that year, the department has ruled that the return must include the indemnity for 1920, before it has toeen received. (Suppose a member of Parliament sends in his return in January and includes in it the indemnity he expects to receive during the year, and that in the meantime a general election comes and he does not receive the indemnity, he will have to pay taxes on an indemnity he has not received. I think in a case of that kind the member should include only hils returns for the accounting period ending on the 31st of January or on the date mentioned in the schedule.


Henry Lumley Drayton: I should like
this section to stand.
Section stands.
On section 5-Patriotic and Red Cross funds:


Mr. CRONYN:: I wish to suggest to the
committee that instead of repealing paragraph (c) it should he amended in such a manner as to allow the exemption of amounts paid by the taxpayer during the year for charitable purposes. Paragraph (c) reads as follows:
-amounts paid by the taxpayer during the year to the Patriotic and Canadian Red Cross funds, and other patriotic and war funds approved by the minister;
It is quite clear that war funds are no longer in existence, so they should not be considered. It is quite true that the Patriotic fund is still in existence, and gifts might still be made to it. The Red Cross fund is also in existence, as it has been for many years. My suggestion would be that the paragraph should be allowed to stand and that in place of the word " war " the word " charitable " should be inserted, so that amounts paid to any of the above named funds and to charitable funds during the year will be exempted. The Act by paragraph (d) of section 5 now exempts the income of charitable .institutions, hut it does not exempt gifts to such institutions when made by the ordinary taxpayer. In the province of Ontario, where there is an ever increasing succession duty payable on death, the Act has always exempted from the tax legacies for charitable, religious and educational purposes. Nor do I think there has been any great loss to the province or any harm done by reason of that law. The American Act specially exempts such gifts up to the amount of 15 per cent of the taxpayer's entire income. Their clause is much wider than the one I have suggested, it reads:
Contributions or gifts made within the taxable year to corporations organized and operated exclusively for religious, charitable, scientific, or educational purposes,
And so on.
to an amount not in excess of 15 per cent of the taxpayer's net income.
I think this is a matter which might receive the favourable consideration of the committee. We all know that these charitable institutions must be kept up, and are largely kept up, by voluntary contributions, and that most of these contributions come from a limited number of people in
[Mr. Pedlow.l
each locality. It is not altogether the wealthy man who supports these charities. It is the man of moderate income, who is called upon time and again throughout the year, and who wishes to, and who does subscribe to the fullest extent for the maintenance of these institutions. It is a little hard and I think ungenerous for this country, after that subscription has toeen made, to force the giver -to pay an income tax thereon. I do not know that one can elaborate or add anything to this plea. I would suggest the following amendment moved by myself and seconded by the hon. member for North Perth:
That paragraph (c) of subsection 1 of section 3 be amended by substituting the word "charitable" in the place of the word "war" in the last line of the said paragraph.


William Stevens Fielding: Does my hon. friend
move that as a substitute for section 5?


Hume Cronyn: Yes.


William Stevens Fielding: My hon. friend is referring to the Act as it now stands, and not to the Bill, and he may have to change his amendment slightly.


Hume Cronyn: Yes. Unfortunately, having just come down from a committee meeting, I had not seen the Bill.


Henry Lumley Drayton: The section
which the hon. member desires to amend is paragraph (c) of subsection 1 of section 3 of the Act- of 1917, which reads as follows:
(c) amounts paid by the taxpayer during the year to the Patriotic and Canadian Red Cross funds, and other patriotic and war funds approved by the minister.
I understand that- he desires to substitute the word " charitable " for the word " war." I suppose that everybody likes to encourage charity, but after all charity sometimes begins at home. We have a very heavy task in raising the necessary revenue. I do not know just exactly how much the charitable people of this country, and there are many of them, would have their hands stayed by the fact that they had to pay their share towards the country's expenses, or how much more or how much less would be given in consequence of our action in this matter. I do not like, so far as I am concerned, to say no directly to my hon. friend's suggestion. It is a subject which deserves consideration. I would at any rate suggest to my hon. friend that he limit the exemption as provided by the American legislation, which limits it to an amount not in excess of 15 per cent of the taxable income. That is, the American Government says:

If you want to do your duty as you see it, and look after charitable objects to the extent of 15 per cent of your taxes we will help you to do it. The charity is at the expense of the Government to the extent of 15 per cent only. I would suggest that if we substitute Government aid for the generous and spontaneous action of charitable persons we ought t'o have at least some limitation, as exists in America, to the extent that that aid should be given.


Edward Walter Nesbitt: Say 10 per cent.


John Allister Currie: 
Thomas Vien: Much as I sympathize with the hon. member for London (Mr. Cronyn) and the hon. member for Simcoe (Mr. Currie) in their desire Ito encourage charitable grants, it seems to me that there are two great objections to 'the motion of the hon. member for London, and the first objection is given by the Minister of Finance (Sir Henry Drayton), who -says that this is ta charity at the expense of the State. The first -duty of every citizen is towards the State, land no money of (Which the country stands so much in need should be diverted from the aid of the State to charitable institutions, which undoubtedly are deserving of every consideration hut which must be subordinated to the interests of itlhe 'country. Charitable institutions are deserving, it is true, but there is no institution which should appeal more to the consideration of the -citizen than the State. The second objection I have to the motion is the difficulty which it creates for the Minister of Finance in determining what are charitable institutions and charitable objects. There -are a thousand and one charitable funds and institutions throughout Canada, and we are to give to the Minister of Finance the discretion to determine which of them will, and which will not, be favoured. Grants to some of them will be deducted from income and grants to others will nolt, and I think that if the motion is adopted (the position of 'the Minister of Finance will be made very difficult indeed. Broad minded and fair minded as he is, we can -readily understand that his position would be an invidious one under such circumstances, and I therefore think that it iwlill Ibe best to* stand by 'the general law. As the minister has pointed out, I do not think any one will be hindered from making grants to' 'Charitable Institutions whi'dh deserve assistance from wealthy people.


John Hampden Burnham: It might toe inferred from the hon. gentleman's lucid remarks

that he desires charity to contribute to the waT. The Sick Children's Hospital will pay this tax; the sick children will 'be the payers.


Thomas Vien: Does the hon. gentleman think that the determination not to deduct grants from the income will deter rich people from making such grants?


John Hampden Burnham: I do not know that it will; I am not prepared to say so. But I understand thlait this will be deducted from the amount given to charity.


Thomas Vien: No>, from the income.


John Hampden Burnham: It is the same thing.


Thomas Vien: No.


John Hampden Burnham: Is there no loss to charity under this?


Thomas Vien: Not at all.


John Hampden Burnham: What is the hon. gentleman's argument?


Thomas Vien: The argument is that under the motion of the hon. member for London a man who has an income taxable will have the right to deduct from that income whatever grants he makes to charitable institutions. If we accept that motion it will not be the tebaritable institution that will be called upon to pay the tax; the man that makes the grant will have the right to deduct from his taxable income whatever he has given ,as a grant, and therefore I say that it will not prevent a rich man from making a grant to charitable institutions.


John Hampden Burnham: It certainly will deter a man from making such a grant. It is to be supposed that in making the grant be is giving as large an amount as he can, .and therefore if he has to pay the tax it will reduce the grant by that much. In this case, (therefore, the loss will be that 01E the sick children, and in the final analysis they pay the tax.


Thomas Vien: In the example given by the hon. member (Mr. Currie) which prompted my hon. friend to rise,-I refer to the charity loft to the sick .children-i't is not the grant itself that will he taxed but the balance of the estate.


Mr. MIDDLEBRO:: I think the members of the House would favour the amendment made by the hon. member for London (M(r. Cronyn) providing they were perfectly sure of the construction that would he given to the words "other charities." In the section amended, which he mentioned are the
(Mr. Burnham.]
Patriotic Fund, the Red Cross and other charities. If "other charities" means, applying the rule of law, ejusdem generis, of a like nature, I am quite willing to have the amendment passed but if it is going to be construed in such a way that it may include religious institutions of all kinds or institutions that deal with other matters than bodily infirmities and the like I am inclined to think that it would be very ill-advised to make such an exemption because it would place on the shoulders of the Minister of Finance the delicate responsibility of deciding which should be regarded as a charity. We might have contributions to churches that would be claimed as being exempt from income tax. I think it would be well that it should be construed as the Patriotic Fund, Red Cross, and other charities of a similar nature. I should like to hear the view of the. minister as to what charities along these lines should be exempt.


James Alexander Robb: Reading this clause in the
Bill, it occurs to me that there must have been some truth in the statement published in the daily press during the years of the war that certain parties in Canada had subscribed generously to the Patriotic and Red Cross funds, but had never paid and the consequence was they were enabled to escape the assessment made by the Department of Finance. I have it in my mind now that the minister is going to guard against that in this Bill.


Mr. McGIBBON (Muskoka):: It appears to me that the object of this committee is to find means of getting revenue to run the country. Instead of making loop-holes to lose revenue we should rather tighten up the provisions of the income tax law so that this country will have sufficient money to pay its debts. It appears to me that the amendment as submitted is a dangerous one. What limit's would you put on it? It opens the way to all kinds of false declarations and it puts the minister in the awkward position that he has to take the responsibility of depiding what should be exempt and what should not be exempt from taxation. I would rather see the minister go a little bit further and wipe out every exception. A man who gives charity gets enough credit for it without wanting to have his contribution exempted from taxation. Every man should be willing to pay his just share of taxes towards running the business of the country and I am not in sympathy with making loop-holes to let any man evade his fair share of taxes. I would rather tighten

up, make it as equal as we can and make every person in the country large or small, bear his proportionate share of the expenses of the country. It should be put on a business basis and I am glad the Minister of Finance is trying here to make us pay our way the same as any business man, or honest man would pay his way and to enable us to run this country on a business basis.


The CHAIRMAN (Mr. Steele):: Shall the amendment, be adopted?


Edward Walter Nesbitt: I would like to suggest
that the paragraph stand to let the minister have an opportunity of looking it over. I am quite sympathetic with any real charity. It- looks as if it might be quite feasible for some things to be brought under the head of charity that really are not charity. I am quite in accord with the proposal that the word " charity " shall be added. I have not a memorandum here of the original clause. The Bill just says that a certain clause shall be struck out. I would like to suggest that the word " patriotic " be dropped. That does not apply very frequently now. What would you call a patriotic association? When the war was on there were certain things that could easily be described by the word " patriotic " but these organizations are unnecessary now. I do not think it would be hard to define what " charities " are. That is why I suggest the minister allow the paragraph to stand, give it some thought and see if the word " charities " could not be so defined that it would include only what the hon. member for London has in his mind; that is a real, actual charity. I do not agree with the statement that a man who generally gives to charity is a man who is getting any advertisement out of it. A man who generally gives to charity gives for charity's sake and gets no benefit or advertising. I assume that he gives it secretly and that he gives it out of the goodness of his heart.


William Stevens Fielding: I quite agree with my hon. friend from Lotbiniere (Mr. Vien) that this provision would not prevent a rich man from giving to charity if he wished to do so. There are many rich men-and we all rejoice that it is so-whose hearts are as big as their, fortunes, and I have no doubt that they would still give. But what the hon. member for London states is true that after all, the multitude of those who contribute towards charity are not rich men. They are mostly men of very moderate means and it is that class of contributor who would benefit by the amendment proposed by the
hon. member for London. The man who has a fortune and gives a few thousand dollars does not miss that amount, but the man of very moderate income who receives every week of his life some application for a contribution to a worthy charity, in the aggregate gives quite a percentage of his ordinary income in that way. If he could be exempted from the payment of taxes on those contributions it would rather encourage him to give. I am sorry for the Minister of Finance, who is going to be in a very difficult position if he has to determine what is a charity and what is not. But he has lots of difficulties these days and adding one more to his troubles is only a small matter. There is much to be said on both sides, but I think that the weight of the argument falls on the side of the hon. member for London.


Henry Lumley Drayton: How would the hon. gentleman (Mr. Fielding) propose to check the payments made for charitable purposes? How could you have the word " charity " in the Act and not give it an elastic meaning. Suppose it had an elastic meaning? There are very few churches that do not carry on a good deal of charitable work. How would you find out what was given for charitable work in connection with a church? One man might go to church and put $5 on the plate and not advertise the fact while another man might. I see great difficulty in ascertaining what is the meaning of the word " charity " unless you tie it down to certain organizations. By leaving it general and wide open I doubt if we would ever get anywhere.


Daniel Duncan McKenzie: Do I understand the
minister to say that the amendment as it stands in the Bill does away with these exceptions?


Henry Lumley Drayton: Yes.


Daniel Duncan McKenzie: I entirely agree with
that-. I do no,t think there should be any cheese-paring at all. I think it better to strike them out altogether.


Mr. CROTHERS:: There is still another
objection to extending the exemption to contributions to charitable institutions, although it may not be a very formidable one. The objects mentioned in the Act of 1917 were of a national character and one making a contribution to the Patriotic Fund was making a contribution to a fund for all Canada. If you alter that and exempt the sums paid to charitable institutions, a man, to take an illustration, might- reduce his income tax by $10,000. That $10,000

belongs to the people of Canada. He would very likely if he were prompted to give aid to a charitable institution give it to an institution in his own town. Thus he would be taking the money of the people of Canada and giving it to the people of his own city or town. It is not a formidable objection but it is an objection I think.


James Alexander Calder: I might mention another illustration along the same line, that came up for discussion this morning in another way. In the province of Saskatchewan, for example, our municipalities pay the entire cost of hospitals; the hospital management does not appeal to the public at all. The burden of carrying the expenditure in connection with our hospitals is always borne by the people as a whole in the way of taxation. Consequently there are no contributions of this kind to charitable institutions of that nature. But I understand, for example, that in the city of Toronto the hospitals there are maintained to a very large extent by private contributions. Well, why should a man in Toronto be partially exempt from his income tax if he makes contributions to an institution there, Whereas in 'Saskatchewan our people do not make contributions of that kind to the hospitals and have to bear the whole income tax. You will find all sorts of such anomalous situations. I think the illustration given by the hon. gentleman who has just spoken should not apply unless the charitable institution is national in its scope and has national work to do. Otherwise I think you will have all sorts of anomalies in the working out of a provision of that kind.


William Stevens Fielding: If the people of Saskatchewan escape 'claims for a hospital they are called upon to make good in other respects. I do not imagine that among the many inducements that are offered to people to settle in that province we could hold out to them the expectation that they would not have toi contribute to charities; in one form or another they will get at them.
, Another point occurs to me. Let me say that I think nine men out of ten who1 will claim an exemption of this kind can be trusted to make an . honest return. I think the cases in which this privilege would be used to evade the law are very few indeed. The man who gives liberally to these institutions is not the man who is likely to make a false income tax return.


Henry Lumley Drayton: I entirely agree with my hon. friend. It is not the man who does the right thing who. is likely to evade the Act. It is the man who would

not give anything at all to charity, and he is the one that I want to look after.


John Allister Currie: I think possibly the
amendment could be modified so as to cover cases where the grant is made to an institution that is recognized by the State. As drafted the amendment possibly leaves the door too wide open and would cover an organization which would not really be recognized as a charity. But I think that if the Government took the clause under their consideration the sense of the House is largely to the effect that in the case of charities that are recognized by law a man might be allowed to make contributions Which would be free from the income tax. With respect to the province of Saskatchewan they, of course, are starting out new and are beginning in the right way by making the State take care of all their charitable work of that kind. Unfortunately, however, in the province of Ontario, and the other older provinces, the old system of a man bequeathing money to charity in his will, and of the public sup porting these charities to a large extent by individual contributions, prevails. In Ontario there are hospitals in every town of any size which hospitals are maintained by grants from the province and from the local municipality, and largely by contributions from kind-hearted people. The same system obtains in the province of Quebec, and the amount of revenue that will be lost to the Government through this exemption would be very small. In the case of the Sick Children's Hospital in Toronto, unless there was ail exemption the institution would lose something like forty or fifty thousand dollars a year.


Henry Lumley Drayton: It would not turn on this at all.
Mr. 'CURRIE: At the same time I think the clause should be changed so as to cover a case of that kind. Otherwise some $50,000 will be taken directly out of that hospital which is one of the greatest charities in the Dominion. For that reason the clause should be amended so as to relieve the situation. I would suggest that rather than have the matter voted on and encounter any trouble-seeing that we are all concerned in doling the best we can ta meet the situation-the Government should reconsider the clause and see if the proposed amendment cannot be so changed that the door would not be left open too wide, and have it so that if an individual makes contributions at all he should contribute to a national charity.


William Stevens Fielding: I think if the minister and the member for London would spend a few minutes together they would reach a conclusion, and I for one would willingly submit to their judgment.
Clause stands.
On section 6-Income tax and persons liable thereto:
(Mr. NICHOLSON (Algoma E.) I would like to ask the minister whether he has considered the question of extending the income tax exemption to "householders" in paragraph (a) of subsection 4 of the original Act. It specifies that 4 per cent shall be collected upon all income exceeding $1,500 in the case of unmarried persons and widows and widowers without dependent children, and exceeding $3,000 in the case of all other persons. By the amendment of 1919 the tax was made applicable to income exceeding $1,000 in the case of unmarried persons, and widows or widowers without dependent children, etc., and exceeding $2,000 in the case of married persons. There are a number of unmarried persons and widowers who have households to maintain and have to bear all the responsibilities of married persons. Included among these are a large number of .workingmen, and I would ask the minister if he has considered the advisability of making the exemption apply in the case Of "householders," that iS to say using the term "householder" instead of "unmarried person.
Sir HENRY (DRAYTON: There is a good deal of difficulty in finding out what a householder is. Looking at other tax laws this, so far, seems to be the only way of providing for the exemptions. However, consideration of this Bill may not be finished to-day and the point might be considered a little later on.


*Mr. NICHOLSON (Algoma):: The Ontario Act uses the term that I have mentioned.


Daniel Duncan McKenzie: I support the view of my hon. friend with respect to any man who is a householder and is getting exempted up to $1,000. I supported the same view yesterday, although upon a different matter, and the minister knows what I have particularly in mind. There are many persons not married who are obliged to maintain households, and upon whom devolve the same responsibilities and expense as devolve upon the man who happens to be married.
iMr. ROBB: I should like to hear how the minister regards this section. Does this mean a dual tax, that is to say that a person residing either in England or the United States and paying taxes to the government of either country will also have to pay a tax in Canada?
(Sir HENRY DRAYTON:	The object of
subsection 5 is .to cover the case of such men as mining engineeis who, having their address outside of .Canada, spend five or six months of their time in this country and derive a very substantial income from work which they do here. We think that they should pay a tax on that income. We have an arrangement at present under which people who come from the United States into Canada and engage in work from which they derive an income may have credited to them by the United States authorities in respect of income tax any amount which they pay to us on that account. The same thing applies to Canadians who engage in temporary work in United States.


Daniel Duncan McKenzie: That must be by international arrangement.


Henry Lumley Drayton: It is so provided by statute. We give a rebate in respect of .taxes collected by foreign countries from persons who derive ian income from work in Canada and who pay income tax to us in respect thereto. This applies, of course, to persons from foreign countries which have a similar statutory provision.


James Alexander Robb: Does that apply to investments? If persons residing in the British Isles and having investments in Canada pay income tax to the Canadian Government are they exempt from taxation in the British Isles?
(Sir HENRY DRAYTON: That is a question that has given us a great deal of trouble and to which we have given much consideration. The whole matter is now being considered by a Royal Commission in the Old 'Country, and we hope to make some satisfactory progress in the matter. At present no such relief is given as my hon. friend suggests.


James Alexander Robb: (The minister must see the importance of having this straightened out at an early .day; otherwise investments in this country will be prevented.


Henry Lumley Drayton: It is most important.


Jacques Bureau: Is there any particular
machinery for collecting the tax from persons who have resided in Canada for six months only? We could not get -at a man once he left the country.


Henry Lumley Drayton: There is no
special machinery.


Jacques Bureau: Would it not he well to provide that the person who employs the mining engineer or the technical man who gets very high wages .and who is only temporarily employed in Canada shall deduct the amount of the tax from his remuneration and make a return thereof to the department?	.


Henry Lumley Drayton: Most of these
men return to Canada. But there is a great deal in my hon. friend's suggestion; we will see what can be done in the matter.


Donald Nicholson: A large number of men in Canada who constitute our floating population are, I believe, entirely escaping the income tax. I want to be specific; I will refer to the part of the country in which I live. Employers of labour in the newer parts of Canada are asked to furnish to the department a list of all their employees who earn the equivalent of $1,000 a year and who work in Canada for six months or longer at a time. This means a very considerable burden on the employer in the keeping of records, and my judgment is that the department is getting nothing as a result in the way of revenue, because these men are moving around from place to place in such a way that the income tax collector cannot catch up with them. Some of the people, returned soldiers, for instance, feel that they are not being justly treated in this matter. We have a large number of foreigners in Northern Ontario. Recently I happened to be in a bank in a town in Northern Ontario. Two foreigners came in to draw out their money before going home to the old country; between them they had accumulated over $7,000. A returned soldier who was standing by said to me: "Is it fair that ihese men should wholly escape taxation while we who have just come back from the war and are getting into employment are being taxed on our incomes over $1,000?" What answer could I give? I made a suggestion to the department, and I give it now to the committee for what it is worth: that these employers, instead of being asked to send in elaborate returns giving the names of foreigners whom they would not know on the street if they met them, be called upon [Sir Henry Drayton.1
to collect the tax out of the wages of such classes of employees as I have indicated. That may seem a drastic method of collecting the tax on a man's income. But I submit that if these people are to be reached at all some means of that kind will have to be adopted; otherwise they will go on earning substantial incomes, as they have been year after year, without contributing a nickel to the national revenue.


Jacques Bureau: Do I understand my hon. friend to mean that these men should have paid a tax on the amount which they withdrew from the bank?


Donald Nicholson: No, I do not meant that.


Jacques Bureau: They may have earned less than $1,000 a year.


Donald Nicholson: Well, if they did, they should not be taxed, but the majority of them earn much more than that and are escaping taxation. I am prepared to say that 10,000 men between the Ottawa river and the boundary line between Manitoba and Ontario who are earning more than $1,000 a year are wholly escaping income taxation simply because no method has so far been adopted of collecting from them. I have no method to suggest, unless you catch them at the time that they are receiving their wages.


Jacques Bureau: You w'ould have to say to the ordinary labourer who works thirty days in one place and fifteen in another: "You are earning so much per day, which is so much more than $1,000 a year," and then you would have to force the employer to collect the money for the Government.


Mr. MANION:: I wish to support the remarks of my hon. friend (Mr. G. B. Nicholson). In my city a great deal of piece work has been going on during the last few years, and it has been the complaint of the people there that many men of outside or alien nationalities were earning large wages on piece work, even as high as $10, $15, and $20 a day, and contributing to this country absolutely nothing by way of income tax. I wish to support the remarks of my hon. friend (Mr. G. B. Nicholson) in that regard, because I think his remarks are well worth considering by the Minister of Finance as a new method of securing revenue for the Dominion treasury from men of this kind.


Jacques Bureau: The machinery is hard to work.


Mr. McCOIG:: There is a great deal of truth in what my hon. friend (Mr. G. B. Nicholson) has stated. Many foreigners are coming into this country and earning large wages, and they are, to a large extent, doing what the hon. member has stated. While they are in this country they spend practically nothing; they save up their money and they send their savings to the country from which they came, thus getting out of paying one cent of taxes or contributing in any way to the upkeep of this country. In the constituency which I have the honour to represent there are many Mexicans who earn large wages, who live on practically nothing and who send their savings back to their own country, thus evading any-responsibility for the upkeep of this country. The hon. member is not trying to find any fault; he is suggesting that this is a matter that should be looked into seriously by the Government, and if we can get a revenue from this source, I am satisfied that every hon. member will heartily approve such action on the part of the Government.


William Stevens Fielding: I want to offer the very smallest kind of criticism. If the minister will turn to subclause (5) at the bottom of clause 6, I think his purpose will be made clearer if he will strike out the comma after the word "Canada" in line 26 or insert a comma after the word "Canada" in line 27. We know what the purpose of the minister is, hut it would be made plainer by that change.


Henry Lumley Drayton: I move that
amendment.


[Stage Direction]
Amendment agreed to.
M. J. E. FONTAINE (Hull):	Monsieur
le president, je desirerais bien avoir une copie de la version frangaise du bill. Ou pourrais-je me la procurer?
The CHAIRMAN (Mr. J. M. Douglas):: The hon. member is asking for a French copy of the Bill?


Mr. FONTAINE:: Oui, Monsieur.


James McCrie Douglas: The French copies are on the way from the Printing Bureau, but as the Bill has been read a second time, no exception can be taken at this time.


Jacques Bureau: The hon. member is not taking any exception; he is asking fdr a French copy.


James McCrie Douglas: The French copies are on the way from the Printing Bureau.


Mr. NICHOLSON (Algoma East):: Will the minister take into consideration the matter to which I have referred, because it is of vital importance in many parts of the country?
-Sir HENRY DRAYTON: I will do so, and I should be very much obliged if the hon. member and any other hon. -member who is -interested in the matter would come and * see me about it.


James Alexander Robb: In considering that matter, the minister should also take into consideration -the position of Canadians who are now moving into the United States. More young men are at present going -into the United States and seeking work there than during the past fifteen years. There should be a reciprocal arrangement between the United States and -Canada as regards citizens moving from one country to the other.


[Stage Direction]
Section agreed to. [DOT]
On section 7-5 per cent added to tax and surtax on incomes of $5,000 or more.
Edward Walter Nesbitt: Why does the minister
make this retroactive, and what will he do in cases where the tax has already been paid for 1919?
-Sir HENRY DRAYTON: No -income tax has yet -been paid for 1919. The tax is not levied; -the returns were due only on the 31st of last mouth, and in one sense this is not retroactive at all. The tax is to be paid this year, and we are getting the extra 5 per cent on the taxes to ibe paid this year because we need the money.


Edward Walter Nesbitt: I quite appreciate that. But when the minister says that none has been paid, I understood from one corporation that they had paid -their 1919 taxes.
-Sir HENRY DRAYTON:	The commissioner informs me that it is :quite -impossible that they should have done that. No assessment has been made at all. The assessment is held up on account of this Bill.


Edward Walter Nesbitt: I do ^not like to doubt the word of the minister.
Mr. PROL'LX:	Does this mean 5 per
cent before exemptions are deducted or after they are deducted?


Henry Lumley Drayton: This means
taxes on incomes of $5,000 and upwards.


John Allister Currie: How can the minister
justify his action in starting to impose such heavy taxation on the people in addition to

their present taxes? I have read his statement to the public as to expenditures and the amount that he expects to collect, and as nearly as I can figure the matter out, he is going to show a surplus of about $150,000,000 this year. Therefore, I cannot see any necessity of imposing further taxation on the people. The newspapers state that 80 per cent of the members do not pay taxes, so that those who have to pay taxes say that members of Parliament who do not pay taxes want those who pay taxes to be taxed still further. I must be very dull on figures, because I cannot understand the necessity for this additional taxation when most of the expenditures we have this last year, such as Soldiers Civil Re-establishment and so on are going to be dropped this year. As regards the $50,000,000 that we have to pay on account of the railways, we must secure some one to manage the railways in such a manner that the revenue will cover the expenditure, because we cannot be always making up deficits. The minister has dropped one expenditure of $30,000,000 and another one of $35,000,000. What then are we going to tax people so much for? The proper procedure would be to cut off taxes instead of adding to them.


Jacques Bureau: We shall be dead before they are cut off.


John Allister Currie: That is iny view of the
matter, and I want to know if the minister expects to have any unforeseen expenditures this year.


Jacques Bureau: There is a deficit.


Henry Lumley Drayton: 5 per cent to the total of all the taxes.


Edward Walter Nesbitt: If you mean to add this to the normal tax and then to the surtax, that would be 10 per cent, and the minister might as well tell us whether that is the case or not.


Henry Lumley Drayton: No, it is 5 per
cent on the total of 'the taxes. For example, the tax on $5,000 is $120. If you add 5 per cent to that, that means $6, or a total of $126, and the same will apply throughout.


Edward Walter Nesbitt: That is very relieving.


Daniel Duncan McKenzie: This clause reads:
The several taxes and surtaxes prescribed by subsections 1 and 2 of this section are hereby increased by the addition of 5 per centum to the amount of each of the said taxes and surtaxes payable-
And so forth. A certain amount is now payable under the present law. Does this mean that 5 per cent should be added to the amount that the man is now called upon to pay.


Henry Lumley Drayton: Five per cent
of the total amount he has to pay under the present law.


[Stage Direction]
Section agreed to.
On section 8-partnerships:
Edward Walter Nesbitt: Would the minister read the clause as amended?


Henry Lumley Drayton: The present Act reads:


John Allister Currie: There was no deficit this year.


Jacques Bureau: What about the railways?


John Allister Currie: The operation of the railways vras paid out of current revenue. The hon. member does not read the statements of the affairs of the country or he would not make such statements. The interest on the bonds were paid out of current revenue and after we had paid for the railways and the bonds and everything else, we had $30,000,000 odd this year over. This imposing of heavier taxation is a mystery to me unless the intent'on is to tax everybody to death.


George Brecken Nicholson: I
should like to know whether the words-
The addition of 5 per centum to the amount of each of the said taxes and surtaxes.
-mean that 5 per cent will be added to the normal tax and 5 per cent to the surtax as well?

Any persons carrying on business in partnership shall be liable for the income tax only in their individual capacity; provided, however, that a husband and wife carrying on business together shall not be deemed to be partners for any purpose under this Act. A member of a partnership or the proprietor of a business whose fiscal year is other than the calendar year shall make a return of his income from the business, for the fiscal period ending within the calendar year for which the return is being made, hut his return of income derived from sources other than his business shall be made for the calendar year;
The whole change made here is that the taxpayer not only makes the return but the computation on that return. That does not come into force this year, hut next year. Under the Budget proposals the taxpayers are in future to assess themselves so as to save time and get the money in at once.


[Stage Direction]
Section agreed to.
On section 9-income from pensions:
Jacques Bureau: What is the change here?


Henry Lumley Drayton: Paragraph (j)
of section 5 of the present Act reads:
-the military and naval pay of persons who have been on active service overseas during the present war in any of the military or naval forces of His Majesty or any of His Majesty's Allies.
There seems to be no reason for that -to be continued, so it is struck out. Paragraph (1) reads:
-income derived from any pension granted to any member of His Majesty's military, naval
or air forces	 and the income derived
from any pension granted to any dependent relative of any person who was killed or suffered any disability while serving in the said forces in the said war.
As it rea<ds now, it says that the "income from pensions " shall not be taxable, but it is the pension itself that should not be taxable, and SO' we say that no pension so earned shall be taxable. Instead of reading "income derived from any pension," it will now read:	" any pension " granted
to any member of His Majesty's military, naval or air forces or to any relative, and so forth. It would be manifestly unjust to tax those pensions. They are used annually; they are not invested. The idea is to make it clear that the soldiers' pensions are not taxable.


[Stage Direction]
Section agreed to.
On section 10-one-quarter tax to be forwarded with return; balance may be paid by instalments with interest:
Jacques Bureau: Why is the taxpayer required to forward one-quarter of the tax with his return? I think it is only fair that a man should first get his bill certified by the authorities before he pays any instalment.


Henry Lumley Drayton: Perhaps it is a good thing that the painful process of extracting the tax should be started as soon as possible. It is really a good thing for the taxpayer. There have been any number of complaints by taxpayers that they did not get their bills soon enough.


Jacques Bureau: They are superpatriots.


Henry Lumley Drayton: Nevertheless,
that is a fact. These complaints have been made. Furthermore, there is no reason why the money should not be paid at the earliest possible moment.


Jacques Bureau: I agree, but I want to
get my bill before I pay.


Henry Lumley Drayton: You make out your own bill.


Jacques Bureau: I may not agree with the man who receives it at the other end.


Henry Lumley Drayton: That may be,
but we feel that it is important that the money should be paid at the earliest possible moment and that the department should not waste a lot of time determining what the real income is.


William Stevens Fielding: I see a difficulty in the direction indicated by the hon. member for Three Rivers. A man will he obliged to be his own assessor in this matter and very many men will not be able to determine what their taxable income is. The hon. minister says that there must be an investigation, and that very fact shows that the innocent taxpayer himself may be in doubt. I agree that once a man has received his bill the sooner you can get the money the better. But the ordinary man will have some difficulty in deciding what his taxable income is. He will put items in one way or the other which the department may not approve of. How is he to know what his actual tax is until he gets his bill? I sympathize with the minister in his desire to get the money as quickly as possible and to reduce the labour of the tax gathering authorities, who will have a troublesome job, but at the same time there is something in the criticism of the hon. member for Three Rivers, and until a man has received his tax bill I do not see how he can make a payment on account.
Mr. DuTRJEMBLAY: I think the contention of the hon. member for Three Rivers and the hon. member for Shelburne and Queen's is absolutely correct. Under the present law it is extremely difficult for ordinary ffeople to determine the amount they have to pay each year. The collectors will t-ell you that in Montreal thousands of people are faced with this difficulty and want to know what this or the other item means, and there is great room for error and misunderstanding. I think that the Government should send the bill to the taxpayer. It is very unfair to put the people in such a position as to be liable to a penalty if they do not pay up within a certain time, when they have no means of properly complying with the law.


Edward Walter Nesbitt: The tax for 1919 has not been paid. Have the statements been sent out to the people?	<


Henry Lumley Drayton: Yes.


Edward Walter Nesbitt: Are they supposed to
send in those statements in accordance with the clause?

Sir 'HENRY DRAYTON: No; this section does not come into force until next year.


Edward Walter Nesbitt: It applies to 1920.


Henry Lumley Drayton: It applies to incomes received in 1920 which are to be returned in 1921.


James Alexander Robb: The situation is somewhat complicated by the multiplicity of taxes. For instance, there is an allowance for business profits tax and also an allowance in regard to taxes already collected on dividends. If there were only one tax, the income tax, the matter would he simpler, and it would be sound business for the debtor at once to make payment. But the minister himself, by the multiplicity of taxes, is going to make the situation difficult; and later on, before the clause passes, I shall direct his attention to the question of penalties. It seems to me that the penalties are rather extreme in view of the dangers which threaten people who may innocently make mistakes in rendering their accounts. Even the minister realizes this, because he anticipates, according to the clause, that there will he many bankruptcies on account of this taxation and he makes provision for such cases. This clause needs revision.


Mr. DENIS:: I observe that in his Budget Speech the minister says that in all cases where it is discovered that over-payment has been made by the ratepayer, a refund for the amount must be immediately made to him or applied on any instalment due or becoming due. This would to a considerable extent relieve the severity of the law now under discussion; but so far as I can see, no cognizance has been taken of this statement in the legislation we are now considering.


Archibald Blake McCoig: Might not the minister allow this clause to stand? There will be many objections from different members of the House to its passing, and the hon. member for Shelburne and Queen's and the hon. member for Three Rivers have already expressed opinions which the minister should take into consideration. I think the minister might let it stand.


Henry Lumley Drayton: Until eight o'clock.


Daniel Duncan McKenzie: A certain questionnaire is now sent out and questions are to be answered by the taxpayer. That form is sent back and the rest of the work is done by the department. The amount is ascertained and the bill is sent to the taxpayer. 'Speaking for myself, I should think that it would

be better to continue that form. The people in the last two or three years have become accustomed to it, and I would suggest to the minister that he stand by the old method of having the amount ascertained in the department and sending the bill direct to the individual. I venture to say that this new proposal is only duplicating the work; hardly one man in a hundred will be able to ascertain the proper amount he has to pay, and it may be discovered in the long run that the whole thing is wrong and has to be done over again. I do not say that any taxpayer will intentionally give a wrong return, but this will happen, and the department will discover that there are errors and a duplication of work, and possibly the taxpayer will be subject to a fine because he innocently failed to make a correct return. I seriously bring this matter to the consideration of the minister, and would suggest that the amount be ascertained by the department itself. After the department has obtained the facts it can send the bill direct to the man. As to what terms the department may make with the taxpayer as to instalments and so forth, that is a matter for their consideration. I do say that the amount of the bill should be ascertained when the proper machinery is present for ascertaining it.


Mr. SINCLAIR (Guysborough):: The minister might make it plainer for the people if he put on the margin of the form a table showing the tax. Most people have not the statutes before them. Some of the banks have published a little pamphlet with a scale showing what the tax would amount to on certain incomes and that is very handy. Many people have not got that. When the minister is making a new form it would be easy to put on the margin something that would let people know the amounts that they would have to pay. That is all the more necessary owing to the fact that the minister is asking the people to advance 25 per cent of the tax when making their return.


Mr. LOGGIE:: It strikes me that in the end it would be much more satisfactory if the minister would continue having the returns made as they have been made. Let the taxpayer, when he is .sending in his return to be approved, send in 25 per cent of the approximate amount and then make the tax due and payable after the return has been passed upon by the department.


Henry Lumley Drayton: Twenty-five per cent cash?


Mr. LOG  GTE@: Twenty-five per cent in cash and the balance after it has been passed upon by the department.
Progress reported.
At Six o'clock the House took recess.
After Recess.
The House resumed at Eight o'clock.



PRIVATE BILLS.


[Stage Direction]
Bill No. 145 (from the Senate) for the relief of John William Wallace.-Mr. Wallace.

[Stage Direction]
Bill No. 162 (from the Senate) for the relief of Margaret Henrietta Pettit.-Mr. Mowat.

[Stage Direction]
Hon. HUGH GUTHRIE (Acting Solicitor General) moved the second reading of Bill No. 126 to amend the Bankruptcy Act. He said:	«
The House is aware that during the first session of 1919 a Bankruptcy Act was passed by this Parliament. That Act did not go into force at the passing thereof hut by its provisions was to go into force upon proclamation being made therefor by the Governor General in Council. Early in the present session the proclamation was issued bringing the Bankruptcy Act into force on the 1st of July next. The Act itself is rather a comprehensive measure and somewhat intricate. One object in allowing <a lapse of time between the passage of the Act and its coming into operation was to give the people .an opportunity of understanding it, and during the past year there have been certain criticisms levelled at it. A number of suggestions have been received from Chambers of Oommeroe, from mercantile 'associations, from judges and from Bar Associations suggesting certain amendments which had not occurred to 'any member of the House when the Bill wias in committee last year. These have now been examined and passed upon by the law officers of the Grown, and it is felt that a number of them should be incorporated in the Act (for the purpose of simplifying and making it generally more workable. It (would be a difficult thing on a motion for the second reading of the Bill to discuss these matters as they appear in the Bill itself-they are somewhat technical,-but most of the amendments I think 207
are ralther clerical than otherwise. I would ask the House to pass the second reading and allow the Bill to go into committee when the various . amendments proposed can be more fully explained.
Motion agreed to and Bill read the second time, and the House went into committee on the Bill, Mr. Steele in the Chair.
On section 2-"debtor."
Mr. GUTHRIE:: The only change made by clause 2 as printed in the Bill is to insert the words, " except by leave of the court " in line 21, and also the words, " or afterwards by leave of the court" in line 25. The reason- for the amendment is simply this., By the Act passed last session all corporations were placed under the jurisdiction of the Bankruptcy Act for the purpose of winding up. It has been suggested that some of the provisions of the old Winding-Up Act, as to assets and as to the rights of creditors and the rights of contributories, might in some rather indefinite cases be useful for the court in settling the assets of an estate or the rights of contributories. It hae been suggested by some of the judges of Canada that if any of these special cases should arise, by leave of the court the aid of these clauses in the Winding-Up Act might he invoked under the Bankruptcy Act, but it would only be in special cases, and therefore the words inserted in the amendment are, "except by leave of the court." I see no objection to the amendment, though personally I thought the section was good enough as it stood.


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 3-" Locality
Hugh Guthrie: The only change in that is with regard to the term of six months during which the debtor carries on business. In the Act as passed the language was:	,


within a bankruptcy division or district where at the debtor has carried on business for the longest period during the six months immediately preceding the date of the presentation against him of a bankruptcy petition.
The proposal now is to strike out the words, " for the longest period during the six months " and insert the words, " whereat the debtor has carried on business at any time during the said six months immediately preceding the date of the presentation against him of a bankruptcy petition."
It may be hard to ascertain just where an insolvent debtor has carried on business for the longest period during the last six



months, and it has been suggested it would make it more definite if the enactment were in the form suggested by this amendment.


Mr. TRAHAN:: Have the bankruptcy
divisions or districts been established by the Government?


Hugh Guthrie: I am under the impression that they have. The operation of the Act is now under the Department of the Secretary of State. I have discussed the matter with the Under-Secretary of State, who is very familiar with the whole matter, and my information is that the rules have been prescribed, the bankruptcy divisions established, and I think probably the list of trustees has been more or less completed; I do not think it is finally completed, and will not be, until this amending Act is passed. My information is that all the machinery is well under way for the coming into force of the Act on the 1st of July next.


Rodolphe Lemieux: The proclamation has
been issued?


Hugh Guthrie: Yes.


Rodolphe Lemieux: Were the districts created by that proclamation?


Hugh Guthrie: No, they are prescribed by rules and regulations.


Arthur Trahan: Will these rules and
regulations be printed and distributed before tbe 1st of July next?


Hugh Guthrie: They are practically
ready for distribution; I think my hon. friend could get a copy of them to-morrow. They will be. slightly amended in consequence of these amendments.


Arthur Trahan: These rules have been
made by the Undersecretary of State?


Hugh Guthrie: |By the Governor in
Council.


Arthur Trahan: In order that they shall come into operation is it not necessary that they shall be submitted to the approval of Parliament?


Hugh Guthrie: No, I do not think that is necessary.


[Stage Direction]
Section agreed to.
On section 4-affidavit:
Hugh Guthrie: In the original Act this section reads as follows:
The petition shall be verified by affidavit of the creditor or of some person on his behalf having knowledge of the facts.

The manner of the service and the manner of the verifying are prescribed by the rules; it is considered that the amendment is better drafting than the clause as originally drawn.


Arthur Trahan: But these rules may be
changed by the Governor in Council?


Hugh Guthrie: Yes, the rules of practice may be changed.


Arthur Trahan: And the Governor in
Council may change the procedure in connection with the affidavit? Would it not be preferable to leave the clause as it stands? Why leave this question of procedure to the Governor in Council?


Hugh Guthrie: The memorandum
which I have says that the judges who have gone over the Bill suggest that we do not change the old form prescribed in the Winding-Up Act-a form which has been in force in this country for thirty or forty years.


[Stage Direction]
Section agreed to.
On section 5-proceedings taken in wrong court:
Hugh Guthrie: Subsection (11) is a
new provision. The proceedings should not be nullified, simply because a man files his petition in the wrong court. In this provision the court is given power in such a case to transfer the proceedings to the proper court.


Mr. COPP:: I assume that " wrong
court " would mean a court without jurisdiction?


Hugh Guthrie: The right court would
be the court having jurisdiction. The judge in bankruptcy would have the right to transfer the proceedings to the proper court.


Arthur Trahan: He should have not only the right but the obligation.


Rodolphe Lemieux: I am not a master of
the English language, but it seems strange ' that the expression "wrong court " should be used. Why not say, " a court not having jurisdiction?"


Hugh Guthrie: The petition might be
filed in a court having jurisdiction in the province of Quebec whereas it should have been filed in a court in Ontario. The words " wrong court " here mean, I think, courts which are not bankruptcy courts; I think they are intended to cover any court; if a petition is filed in the Supreme Court of

Ontario and should not be there, it may be transferred to the proper court.
air. ARCHAMBAULT:	Does it mean
that if the proceedings are instituted in Ontario they .may be transferred to the province of Quebec?,


Hugh Guthrie: The bankruptcy judge
would have that power. Bankruptcy courts are federal, not provincial courts.
'Section agreed to.
On section 6-receiving orders and assignments to take precedence of attachments, executions, etc.:


Hugh Guthrie: This is a rather peculiar change, but it is one which I do not think objection can be taken. In the Act as passed we had a provision at the end of subsection (1) which was inserted having regard to the provinces of Nova Scotia and New Brunswick, although it did, not name them. In those two provinces a different practice obtains from that prevailing in the other provinces in regard to judgment debts. There judgments are looked upon as securities; a man taking a judgment will keep it in force for a great number of years, keeping it more as a mortgage than as a judgment, and obtaining annually his interest from the debtor. I understand that a good deal of money is thus invested in those two provinces, and to protect such judgments the House inserted this provision in the Act of last session:
Provided that this paragraph shall not apply to any execution or other process issued against real or immovable property under or by virtue of a judgment registered prior to the coming into operation of this Act, which judgment, as the result of such registration, became, under the laws of the province wherein it was entered a charge, lien or hypothec upon or of such real or immovable property.
It has been suggested that this provision be struck out and that a clause be inserted in the terms of clause 7 of the Bill now before us, limiting the application of that provision to Nova Scotia and New Brunswick.


[Stage Direction]
Section agreed to.
On section'8-avoidance of preference in certain cases:
Hugh Guthrie: This clause has a history. In the form in which it appears in the Bill before the committee, it was practically in the Bill which went before the special committee in the spring session of 1919. It is an embodiment of the Ontario statute, and I think it is the law if not in 207i
all, in many of the provinces of the Dominion of Canada. The special committee which dealt with the Bill in 1919 saw fit to change it, and we thought we had improved it. When it came before the House it was passed in the farm in which the committee submitted it. When, however, it came before the Senate, it was again amended in the form in which it now appears in the Bankruptcy Act. As it appears in the enactment of to-day it is the law neither of the province of Ontario nor of any of the other provinces. There is no great variation, I am bound to say; hut there are some slight changes in language in this clause which is one of the important clauses of the Bill, and I think the result will be that .all judicial decisions which we have had the benefit of in Canada heretofore will not apply to this section as passed by the House last session. Consequently, those who take a deep interest in this measure have come to the conclusion that it would be far wiser to adopt the Ontario law upon the subject which is, as I say, the law in a majority of the provinces of Canada at the present time. The amendment now proposed is practically an adoption of the Ontario clause. It does not make much change in the clause as originally passed; it strikes out these words:
If made, incurred, paid, taken, or suffered, with such view as aforesaid.
That is, with a view of giving a preference. It inserts subclause 2 in the Bill before the committee:
If any such conveyance, transfer, payment, obligation or judicial proceeding has the effect of giving any creditor a preference over other creditors, or over any one or more of them, it shall be presumed prima facie to have been made, incurred, taken, paid or suffered with such view as aforesaid whether or not it was made voluntarily or under pressure and. evidence of pressure shall not be receivable or avail to support such transaction.
Where such a transaction as that is impeached, it shall be presumed prima facie to have been a preferential transaction and consequently, void as against a trustee in bankruptcy.


Rodolphe Lemieux: Void, ipso facto?


Hugh Guthrie: Not as between the parties, but only as against the trustee having a prior claim. I think it is wise to put in the well-understood clause of so many provinces and so to remove any doubt which may exist by virtue of the Senate's amendment of last year. *


James Alexander Robb: The minister would not care to alter the clause to this extent, that if a

party who secured a mortgage had delivered goods within, say sixty days of the demand for bankruptcy, then the mortgage or guarantee might stand good?


Hugh Guthrie: I do not quite understand the question. Three months is the term limit of the clause. Your six months' mortgage, if not fraudulent, if a bona fide transaction, would be good.


Rodolphe Lemieux: But nothing prevents a trustee, even if the transaction be of older date, to prove fraudulent intent?


Hugh Guthrie: It might be fraudulent, no matter how old it is. There is no question of the presumption.


Rodolphe Lemieux: There is no bar to proving fradulent intent?


Hugh Guthrie: Not at all.


[Stage Direction]
Section agreed to.
On section 9-recovery:
Hugh Guthrie: The change in this clause is very slight. Under the Act as passed under the circumstances stated, the section provided that-
The trustee may, with the approval of the inspectors of the estate, institute in a court having jurisdiction in debt to such amount, an action or other proceedings for the recovery thereof.
This clause is much simpler; it reads:
If at the expiration of thirty days from the date of the service of such demand the contributory has not paid to the trustee the required amount, the trustee may take proceedings against the contributory for the recovery thereof in the manner provided by General Rules.
The distinction is this. The manner provided by general rules will be in a bankruptcy court. In the Act as passed, the proceedings could be taken in any court of competent jurisdiction. It has been thought that bankruptcy matters should he dealt with, in soi far as possible, in a single court, in a federal court, and if a contributory is ordered to pay money and does not pay it, the trustee would go to the bankruptcy court in order to take proceedings.


Arthur Bliss Copp: May I be permitted to ask the minister a question in regard to section 31, which reads:
Every conveyance or transfer of property or charge thereon made, every payment made-
And so forth? Supposing a man conveys a transfer by way of mortgage to another man who may be a creditor and the latter advances him more money, what position would that creditor be in?


Hugh Guthrie: I am afraid that would be regarded as a preferential claim and wo'uld be set aside. If the transaction is made " with a view of giving such creditor a preference over other creditors" or has the effect of doing so, "if the person making, incurring, taking, paying or suffering the same is adjudged bankrupt on a bankruptcy petition presented within three months after the date of making, incurring, taking, paying or suffering the same," the same shall be adjudged a preference.


Arthur Bliss Copp: That is going a pretty long way.


Hugh Guthrie: I think that is the law in my hon. friend's own province.


Arthur Bliss Copp: Only as regards personal . property, not real estate. It has that effect in the case of a bill of sale, but not in the case of a mortgage.


Hugh Guthrie: I do not see any reason 'for the distinction between a mortgage and a bill of sale. Property is property, and creditors have the right to get after it. I do not see why it should1 be impeached in the one case and not in the other. I know that in Nova Scotia and New Brunswick they have laws more or less favourable to creditors in regard to real estate. Those judgments which I spoke of a few moments ago are but instances of that. I think the proper principle is to place all creditors as far as possible on an equal footing, and to abolish as far as we can all preferences between them.


Arthur Bliss Copp: The difficulty will be this. A man might be a creditor and someone in need of money may go to this same creditor and borrow $5,000 giving a mortgage on real estate for security. The creditor has the title searched, finds it is all correct, and takes the mortgage. The real estate is clear of all encumbrances so far as he knows. He advances the $5,000 to enable the man to carry on the business and at the end of three months he may be out the $5,000.


Hugh Guthrie: He would not -lose it; he would be an ordinary creditor for it.


Arthur Bliss Copp: He would only rank with the other creditors irrespective of his security.
I am afraid it would have the effect of interfering with legitimate business.


Daniel Duncan McKenzie: Are these General
Rules referred to in subsection 8 new rules that are to be passed? Why should not the minister adopt the practice in the different provinces? In Ontario, for instance, they have the Judicature Act, just

as we have in Nova Scotia, and a well-established .practice, and the same is true of all the other provinces. It would be rather awkward for a man who is getting well up in years like my-self to have to learn a new procedure and practice. The Judicature Adt is the procedure in ia.ll the courts in England, and I do not see why it should not be applicable in collecting .a debt in this court.


Hugh Guthrie: The Judicature Act is not the practice in bankruptcy proceedings in England. The rules there are just as we propose to pass them here. My hon. friend was probably present in the House last year when that question was raised, and - he will remember there was a pretty full discussion on it. One reason for passing these rules is to simplify the practice and make it uniform -throughout the whole of Canada. At the- present time -we have different forms oif practice in the courts of the various provinces of the Dominion'. A man may wish to- invoke the -aid of a bankruptcy court in British Columbia, and may reside in Nova Scotia. There is only one petition, only one procedure. The- id-ea ha,s been to make this as simple as possible, and ito make it uniform. I lam satisfied that my hon. friend (Mr. McKenzie) will have no difficulty in following this practice. I -took the opportunity a -few -days -ago of reading -through the practice, and I -think it much -more simple than.- any practice we hav-e in ithe Ontario courts. I think the chief thing to he gained is uniformity and simplicity. Thi-s, I think, will be obtained in- the rules when they are issued. They have been printed and are practically complete. There may be one or two- changes necessary in consequence of these amendments, -but otherwise I iam assured by the Under-Secretary of State they -are about ready for distribution.


[Stage Direction]
Section agreed to.
On section 10-distribution of estate of bankrupt after notice:
-Mr. GUTHRIE:	There is a very slight
change in this section. The note I have on it is that this amendment is asked merely to correct a mistake in the wording which crept into the Act of last year. So far as I can find out the only change is that they have inserted the words at line 43 "as provided by section 42, subsection 2 of this Act," and in line 46 they have used the Word "regulations" instead of the word "notice." I think these are simply clerical errors, and I do not see any objection to them all.
Section agreed to.
On section 11-not to exceed 5 per cent.
Hugh Guthrie: This clause was suggested by my hon. friend (Mr. J-acobs). It deals with the question of remuneration of trustees. -Certain representations -have been made to the -Government that the absolute limitation of a trustee's fee to 5 per cent in every case would undoubtedly work a hardship in some .eases, particularly where the assets were small and the amount of work to be performed by the trustee was abnormally large. It has always been the custom in -Canada for the creditors themselves or the inspectors to decide on the amount of the trustee's fees, in cas-es where the trustee asks for more than 5 per cent. This practice we think should continue except in oases where the trustee is able to pay the creditors one hundred cents on the dollar, in which case the debtor would have an equity and the court should then decide. As the Bill pasi-ed last session 5 per cent was the limitation in all cases, great and small. We deliberately took it out of the hands of the creditors. It has been pointed out to us, how ver, that in oases of small estates 5 per cent may he too small a fee. The proposed amendment will leave it in the hands of the creditors and inspectors- I think it is only the creditors-to fix the amount in the case of small estates.


Georges Parent: This section does not seem to show that the creditors are going to fix the amount of indemnity to be paid the trustees.
-Mr. GUTHRIE:	We have -another section on that. This is merely striking out that 5 per cent limitation.
-Section agreed to.
On section 12-inspectors' fees.


Hugh Guthrie: The former enactment provided that each inspector might he paid his actual and necessary travelling expenses "in and about the performance of his duties, and such sums only." The committee that threshed this matter out and also the committee of the House were inclined to think that the inspectors should be paid actual expenses. That was the view of the House when the Bill went through, and we so provided. 'However, this is the suggestion of my hon. friend- from George Etienne -Cartier (Mr. Jacobs), and after giving the matter fuller consideration than was given it last year I have come to the conclusion that the proposal is not unreasonable. It fixes a fairly modest fee for inspectors, having regard to the amount of the estate, and I arranged with my hon. friend that I would

take no exception to the clause being introduced. It was introduced in a public Bill brought forward by my hon. friend at the beginning of the session.


Daniel Duncan McKenzie: Is there anything in the Bill to limit the number of meetings that can be held? I followed the Bill closely last year but I do not remember its terms. Some unscrupulous man might have too many meetings.


Hugh Guthrie: I do not know that there is any actual limitation. Clause 42, which is rather lengthy, provides for the meetings that are to be held. The first meeting shall be held immediately after assignment and subsequent meetings may be called at any time by the trustee if he is requested to do so by a certain number of creditors. I do not see any power for inspectors to call meetings; that power rests in the hands of the trustees and creditors.


[Stage Direction]
Section agreed to.
On section 13-proofs of debts.
Hugh Guthrie: The old section is very much like this. It reads:
Every creditor shall prove his debt as soon as may be after the making of a receiving order or after the date of an authorized assignment.
. Mr. PARENT: Is there any form of procedure provided in regard to evidence?


Hugh Guthrie: He just makes his affidavit. A majority of the creditors may dispute his claim and, of course, he will have to prove it in court.


Rodolphe Lemieux: "As soon as may be" is rather vague, is it not?


Hugh Guthrie: I think not; it means as soon as possible or convenient. You cannot very well impose a time limit on a creditor, because he may not be in the country. You have to be reasonably careful of the claims of creditors. So long as the estate has not been actually distributed a creditor may come in under the Act we passed last year. The object is to expedite the matter as much as possible and get all creditors before the trustee at the earliest possible moment.


Rodolphe Lemieux: Is there no time limit?


Hugh Guthrie: Not for the proving of a claim. If the estate has been distributed then, of course, the creditor's claim is barred.


Arthur Bliss Copp: Is there any provision limiting the time in regard to the distribution of the estate?


Hugh Guthrie: There is.


[Stage Direction]
Section agreed to.
On section 14-partners and separate estates.
Hugh Guthrie: The change here is in the last clause. Subsection (3) reads:
If there is a surplus of the joint estate, it shall be dealt with as part of the respective separate estates in proportion to the right and interest of each partner in the joint estate.
The section as passed last year read:
If there is a surplus of the separate estate, it shall be dealt with as part of the respective separate estates in proportion to the right and interest of each partner in the joint estate.
We have just reversed it.


Rodolphe Lemieux: A man may be a bankrupt in connection with a business in which he was a partner, and might be solvent as regards his own private business. Personally he is responsible for any debts incurred in connection with his own private business, but as a partner in a business he is responsible only in so far as the business is responsible. How do you treat that situation?


Hugh Guthrie: I quite understand the question. The defect in the section as printed was due to the fact that the printer left three 'lines out, and I was not aware of that fact until I looked at my memorandum which the Undersecretary of State prepared. He says that the object of this amendment is merely to insert three lines omitted by the printer. I think that the languages of subsection (3) answers my hon. friend much better than I can answer him.
In the case of partners the joint estate shall be applicable in the first instance in the payment of their joint debts, and the separate estate of each partner shall be applicable in the first instance in payment of his separate debts.
That is the declaration of the common law. If after using the separate estate a man still has money left it can go to pay the partnership debts.


Rodolphe Lemieux: Even in the case of a limited business?


Hugh Guthrie: I am not familiar with limited partnerships. There is a law in Ontario permitting limited partnerships, but I have not heard of one.


Mr. JACOBS:: There is a law in regard to limited partnerships in Quebec also. In Quebec, the partner is only liable for the amount of money he agrees to contribute, and nothing further. He is merely like a

stockholder in an ordinary joint stock company, and I assume that this law will not interfere with that rule. When the partnership is registered, notice is given to the commercial public that the limited partner is liable only for a certain sum and nothing further, and I presume that he could not be held under this section for any further sum.


Hugh Guthrie: This section would not hold him liable.


Rodolphe Lemieux: That is the point I had in mind.


[Stage Direction]
Section agreed to.
On section 15-penalty for failure to attend for examination.
Hugh Guthrie: There is only one change; in the eleventh line of the old Act, the word "debtor" is changed to the word "him." But rather than have the section amended we repeal it and put in an entirely new section, so that when the Act comes into force it may have as few small amendments as possible.


Samuel William Jacobs: Is the punishment of twelve monflfes the same as under the English Bankruptcy Act?


Hugh Guthrie: I do not know. We
threshed these penalties out pretty well when we passed this particular section last year, but I do not know whether it is the same as the English Act. I am inclined to think it is.


Rodolphe Lemieux: Is the party who fails
' to appear treated as a criminal or does the person at whose instance he is put into jail contribute to his maintenance?


Hugh Guthrie: I think he would be
treated as any other prisoner in the jail; his maintenance would be paid for by the municipal or provincial authorities. His imprisonment would be imprisonment for contempt of court.


Rodolphe Lemieux: In our practice in the province of Quebec-I am not familiar with the practice in the other provinces, although I was iSolicitor General for a time- in a case of contempt of court, say, or of action for damages, the court may declare that a certain sum be paid or in default the person be sent to jail. A debtor remains in jail so long as a stated sum per week is paid by the creditor. If the creditor fails* to pay for the maintenance of the prisoner; who is placed in what is known as the debtors' ward, the debtor walks out and is free. Is it the same in this case when the debtor fails to appear after being ordered to do so?


Hugh Guthrie: I would not think so. The law which my hon. friend speaks of was at one time in force in England, but that was many years ago. I do not believe that that law was ever in force in Ontario; at any Tate, not in my time.


Samuel William Jacobs: It is still in force in
Quebec.


Hugh Guthrie: I remember a discussion on that point last year, and in certain actions for damage in that province, I believe, a man can be imprisoned. But in this section the man would be punishable for contempt of court for refusing to obey the summons of the court, and his maintenance would be at the expense of the municipal or provincial authorities.


Samuel William Jacobs: If in the meantime the
debtor shows his willingness to give satisfactory answers to the questions, could he not by application be brought before the court and, after having given those answers, be freed? That is to say, as we say in Quebec law, if he purges himself of his offense, would he not be released forthwith? That would be the rule under contempt of court proceedings in our province.


Hugh Guthrie: Under this provision he has a fairly good remedy in his own hands. If he refuses to attend and give evidence they have to summon him and bring him up again, so that he has ample opportunity.
Then after his second refusal:
-the court may, by warrant, cause him to be apprehended and brought up for examination-
He may first of all be brought up for examination.
-and may order him to be committed to the common gaol of the judicial district in which he resides for any term not exceeding twelve months.


Samuel William Jacobs: Supposing the debtor has seen the error of his ways after serving six months?


Hugh Guthrie: He may make application for clemency.


Samuel William Jacobs: Application to the executive clemency of the Solicitor General? May the Lord have mercy on his soul!


Daniel Duncan McKenzie: Reading beyond line
20 there seems to be some doubt as to the protection afforded to one who refuses to answer a question. It is well known that if a man is asked a question which tends to incriminate him, he is not bound to answer it. There seems to be a statement

here to the effect that if there 9 p.m. is any impediment in the way of producing a book or an account he is excusable. I think it is very doubtful if that applies to a man who refuses to answer a question. It is not sufficiently plain to me that if he has any excuse for refusing to answer a question he is excused, whereas if there is any impediment in the way of producing a book or an account he will be excused. The general rule is that a man is not obliged in a civil proceeding to answer any question that tends to incriminate him.


Samuel William Jacobs: Or in a criminal proceeding.


Hugh Guthrie: The section covers the
point raised by my hon. friend Mr. McKenzie if he will read it carefully. The section reads from line 20 on:
-or, if attending, refuses to make satisfactory answers to any questions asked him or refuses to produce any book, document or other paper.
There is a comma.
-having no lawful impediment made known to the examiner at the time of his sitting for such examination and allowed by him.
I think that qualification applies to his refusal to answer a question as well as his refusal to produce a book or paper. I think that the word " impediment " would cover either ground of privilege that a witness might urge.


Daniel Duncan McKenzie: If the minister thinks it is clear that " impediment " is common to both grounds, of course I will be satisfied, but I never saw the word " impediment " used as an excuse for not answering a question. There might be an " impediment " in the way of producing a book- some one else might have the book and the witness might not be able to get it-but the use of the word " impediment " as applied to a condition under which he may refuse to answer a question is new legal phraseology to me.


Hugh Guthrie: If it is an impediment recognized by law a man would be able to claim privilege under it.


Samuel William Jacobs: Does not the Acting Solicitor General think it would be wise, in view of the importance of the question to be decided under the section, to insert a declaration that nothing in section 15 shall take away the right given by the Criminal Code to any person who claims to be allowed not to answer a question on the ground that it might incriminate him?

Mr. GUTHRIE.:	I think the Criminal
Code itself would do that.


Samuel William Jacobs: These are two statutes side by side.


Hugh Guthrie: The language is taken
directly from the English Act.
Section as amended agreed to.
On section 16-solicitors' and witness fees.


Hugh Guthrie: In the clause of the Act which was passed last session we provided:
All attorneys, solicitors '<nd counsel acting for the trustee or for the estate of a debtor in respect of proceedings under this Act, shall be paid out of the assets of such estate their reasonable costs and fees as fixed in a tariff provided by General Rules; but, except as hereinafter provided, the aggregate amount of such costs and fees so payable out of the assets of estates whereof the gross proceeds exceed five thousand dollars shall not exceed five per centum of such gross proceeds.
We have struck out the "five per centum" and the "gross proceeds."


Samuel William Jacobs: Hear, hear.


Hugh Guthrie: My hon. friend says,
"Hear, hear." Well, this is at his own suggestion. I think the amendment is a good one and I have no hesitation in saying the committee ought to accept it.


Samuel William Jacobs: When the Bill left this
House last year the section was pretty much in the shape proposed in the amendment, but when the Bill came back from the Senate it had this objectionable clause which we are now seeking to remove.
Section as amended agreed to.
The 'CHAIRMAN:	Section 17-undischarged bankrupt obtaining credit.


Hugh Guthrie: Before you read that
section may I asik the committee to consider these sections:	Since the Bill was
introduced two very eminent judges of Canada have suggested two sections. One is an amendment to section 65 as to the powers of the registrar of the court. They merely ask to add this clause:
Any person dissatisfied with an order or decision of the Registrar may appeal therefrom to a Judge in the manner prescribed by General Rules.
I do net see any very great objection to that. Another amendment I may mention '.now is to section 71, as to the enforcement of Orders of Court throughout Canada. It has been suggested that clause 3 be added there:
The court may direct any issue to be tried or inquiry to be made by any judge or officer of

any of the Courts of the Province and the decision of such judge or officer shall be subject to appeal to a judge in bankruptcy, unless the judge is not a judge of a Superior Court when the appeal shall be under section 74 of this Act.
That is a matter of convenience. If, for convenience, in any case, it is deemed proper to refer any particular questions to the decision of a judge, even if he be not a judge of bankruptcy, such a course may be pursued. I should not have thought the suggestions were essential to the proper carrying out of the Act but as both of the judges who have made them are, in the provinces where they reside, of the very highest reputation, I think perhaps the Act might be improved if these amendments were included. If the committee is willing I will move them.


Georges Henri Boivin: Mr. Guthrie moves
that section 65 of the said Act be hereby amended by adding thereto subsection 4.


Samuel William Jacobs: I suppose that would mean that if the trustee or receiver is dissatisfied with the decision of the registrar he may also appeal.


Hugh Guthrie: I think that is broad enough to include anybody. I may say that Mr. Justice Middleton, of the Ontario Superior Court, and Mr. Justice Maclennan, of Montreal, have gone very carefully over the Act and these amendments are brought here at their suggestion. They think the amendments will greatly improve the working of the Act. '
Amendment agreed to and section as amended agreed to.


Georges Henri Boivin: Mr. Guthrie now moves that section 71 of the said Act be amended by adding thereto subsection 3. Shall this amendment carry?


Samuel William Jacobs: I think that rule might very well apply to the provinces outside the province of Quebec, but it seems to me unreasonable that judges of courts of inferior jurisdiction should be asked to try any of these questions in bankruptcy. For instance I may point out-


Hugh Guthrie: It is only where the judge of a bankruptcy court would direct, and I think such a judge would be very careful about whom he should refer a question to. In the meantime I would not hesitate to trust them with the power.


Samuel William Jacobs: What I wish to point out is this: The province of Quebec is divided into seventeen or eighteen districts in each of which a judge of the Superior Court site.
Now we also have judges of the inferior courts who try cases under $100. It would not be well to have these judges of inferior courts pass upon questions of bankruptcy at all.


Hugh Guthrie: I quite agree with my hon. friend, but I think the way the matter will work out is that in each province a judge or judges will be designated to attend to bankruptcy matters, and I have no doubt they will be very careful with the administration of this law.


Samuel William Jacobs: Will there be one judge for an entire province?


Hugh Guthrie: There may be one or more. One may be sufficient at first, but as time goes on more than one may be required. I can understand that where a number of minor .applications come up for decision a judge may find it necessary to refer something, but I think he will be very careful as to whom he refers it to. We may as well see it tried out and if any wrong results, at the next session of Parliament we can change the law.


Rodolphe Lemieux: Are there to be special judges appointed for the .administration of this Act?


Hugh Guthrie: No, the judges of the superior court are charged with the administration of the Act, but as between themselves I believe that in arranging their judicial duties they are going to make the apportionment in such a way that, to as large an extent as possible, one or two judges shall deal with bankruptcy matters, for the beginning at all events, until we get a uniform practice.
Amendment agreed to and section as amended agreed to.
On section 17-undischarged bankrupt obtaining credit:


Hugh Guthrie: was entirely too large an amount to fix; that if he ran an account of $60 or $100, under such circumstances, he should be liable to heavy penalties for doing so. It was for that reason that the amount was reduced from $500 to $50. I have no particular view on the subject, but I do think that the running of an account up to so small an amount as '$50 should hardly render such a man liable to a year's imprisonment. Of course, he is guilty of concealing a most material fact, because if he did disclose to the dealer that he was an undischarged bankrupt he would not get the credit. I think that $500 is too high and that $50 is rather low. However, I shall be guided by the view of the committee. 1


Samuel William Jacobs: The Acting Solicitor General will remember how vigorously we on this side opposed this clause when it was presented last year. We pointed out that the marking of a man practically for life for an offence of this kind was not quite in the order of things according to present-day ideas. The Acting Solicitor General has now agreed to raise the amount to $500; that is an improvement over the provision of last year. It does seem to me, however, that it is for the trader to get a report upon these pedple before he deals with them. To take from a man the right to do business at all in his own name and then place him under a penalty of a year's imprisonment for failure to disclose certain things is, to my mind, like "seething a kid in its mother's milk." However, if my hon. friend raises the amount each year in the same ratio as he has raised it this year, I think we shall soon agree. Last year we were opposed^ to this section and this year the Acting Solicitor General has come round to our view.


Hugh Guthrie: I do not know that I have.


Samuel William Jacobs: Well, he has expressed his view in the amendment, which is supposed to contain the combined wisdom of himself and of the Government in this matter. I am glad to know that he comes round to our view, even if it takes a year for him to do it; as we say in French, "mieux vaut tard que jamais."


Hugh Guthrie: There is a great deal to be said in favour of the small amount. I can well understand the position of a retail merchant who is approached by a stranger with a request for credit-a man who has come from some other town where he is an undischarged bankrupt. Now, his asking for credit without disclosing the fact 
that he is an undischarged bankrupt is fraudulent concealment, though $50 does seem to be a small amount in respect of which to render a man liable to a year's imprisonment. I thought that $200 would be more appropriate; however, if the committee is content with leaving it at $500, as in the Bill, I shall not raise objection.


Samuel William Jacobs: Without this clause at all, such a person could be proceeded against under the Criminal Code, could he not?


Hugh Guthrie: There is a general clause to cover that, yes.


Samuel William Jacobs: That is one of my chief reasons for objecting to the clause.


Charles Adolphe Stein: Does this law do away with all provincial laws respecting bankruptcy? I was not here last year when the matter was under discussion.


Hugh Guthrie: Any provincial law heretofore in force which dealt with the question of bankruptcy or insolvency will be superseded by this one.


Samuel William Jacobs: Unless the Privy Council decides otherwise.


Hugh Guthrie: I think my statement is in accordance with the decisions of the Privy Council so far as we have had them.


[Stage Direction]
Section agreed to.
On section 19-repeal of section 97:
Hugh Guthrie: Section 97 is a peculiar section. It provides that:
Any person who maliciously institutes or carries on against any person who has not done or suffered any act of bankruptcy proceeding in bankruptcy under this Act shall be guilty of an indictable offence and liable to a fine not exceeding one thousand dollars or to a term not exceeding two years imprisonment, or to both such fine and such Imprisonment.
It was to prevent the institution of bankruptcy proceedings maliciously against any person. We had quite a heated discussion on this clause last year; I think that my hon. friend (Mr. Jacobs) divided the committee upon it. I remember that the then Acting Prime Minister (Sir Thomas White) took quite strong ground in the matter; he contended that the public should be protected against malicious proceedings. There is no such provision in the English Act. The present Bill proposes to strike out that provision, but I leave the matter entirely with the committee.


Samuel William Jacobs: I must congratulate my hon. friend upon his coming to his senses twelve months after we brought the matter

to his attention. The clause was a foolish one; it was not drafted by a lawyer.


Hugh Guthrie: Oh, yes it was,-by an excellent lawyer.


Samuel William Jacobs: Well, it may have been drafted by a lawyer, but it did not originate in the mind of a lawyer. It originated, I understand, in the minds of the Retail Merchants Association. I can quite understand, therefore, why it should have read as it did. " A shoemaker should never go beyond his last." But what I particularly regretted was that that association should have had sufficient influence with the then Acting Prime Minister to cause this provision to be put in the Act. It was all right enough for discussion outside the House, but solemnly to adopt it in this House as part of a statute was a piece of nonsense. Before this Bill was introduced this year I had introduced a Bill which had for its object the repeal of this clause together with a number of other clauses which have been dealt with by the Government. I shall now have much pleasure in withdrawing my Bill. It was just because I thought the Government had not awakened from their lethargy that I brought in my Bill, and, perhaps, that was the reason the Government brought in theirs. In any event, I am pleased to withdraw mine, and I congratulate the Acting Solicitor General (Mr. Guthrie) on introducing these amendments which, I think, will improve the Act in many respects.
Mr. M'cKENZIE: Do I understand the minister to say that the Bill will be reprinted? And when does this legislation come into force?


Hugh Guthrie: It comes into force on the 1st July by proclamation. The Bill will be reprinted in order that the clauses may appear without amendment. A few changes will be made in the rules, but I think in a few days they will be ready for distribution.


Georges Parent: Are they printed?


Hugh Guthrie: They are printed in a separate pamphlet at the present time, and in all probability they and the Bill will be bound together.


Georges Parent: Have -any trustees been appointed up to date?


Hugh Guthrie: That matter is in the hands of the Department of the Secretary of State. The Under Secretary of State informed me that a very large list of applications had been received, and I think he said that, the applications of certain men had been approved. I have never seen the list, nor inquired about it, but I understand a satisfactory list has been received.


Georges Parent: Is the field open to any one?	-


Hugh Guthrie: Yes.


Jacques Bureau: Except a Liberal.


[Stage Direction]
Section agreed to, Bill reported, read the third time and passed.
Jacques Bureau: I thought there was an
understanding that the Bill was to be reprinted. It has gone through third reading and is now ou't of our hands.


Hugh Guthrie: I do not think the hon. member would ask that the whole Bill be reprinted now.


Jacques Bureau: Was not -that the understanding.


Hugh Guthrie: No, the Act consists of 150 pages. These clauses .are to- be reprinted in the Bill in order that they may .appear without amendment, and the Bill will have to go to the Senate before that can be done. I think somebody had better watch it there.



SUPPLY.

[Stage Direction]
The House again in Committee of Supply, Mr. Steele in the Chair.
Indians-Ontario and Quebec.
Relief, medical attendance and medicines	 $42,7-00
Repairs to -roads, and bridges and
drainage	 1,900
General expenses	 51,875
For clearing of land and purchase of
stock in Northwestern Ontario..	3,000
Total	 $99,475
['I -asked the question because, as the minister has mentioned, a part of the work for which this Estimate is asked will be done in Alaska. I suppose that work is to put into force the conclusions of a famous Alaskan Boundary Commission, the result of whose -investigations was most unsatisfactory to all .Canadians. As the minister knows, on that commission there were two -Canadian commissioners who refused to sign the conclusions arrived -at by the majority. The Canadian commissioners were over-ruled by the American commissioners, with whom the British commissioners joined hands. I infer from the past, therefore, that whenever questions arise as to the determination of boundaries between Canada and the United States the Imperial Parliament has always made appointments. If, in future, the suggestion expressed by the minister to-night were adopted; that is to say, if the commissioners were solely appointed by the Canadian Government, the results might be more satisfactory.\nProgress reported.\nOn motion of Hon. Mr. Meighen the House adjourned at 1 a.m. Wednesday.\nWednesday, June 9, 1920.']
James Alexander Robb: I notice in the Supplementary Estimates there is an item of $50,000 applied on account of an epidemic of smallpox and other diseases. Is that in addition to .this?


Arthur Meighen: That is a supplementary item, not for this fiscal year, but for the last fiscal year. It is to cover a Governor General's warrant for extra money that had to be provided to fight the "flu."


Jacques Bureau: How many reserves does this-item cover in the province of Quebec?


Arthur Meighen: Twenty, and 138 in Ontario.


Joseph Arthur Calixte Éthier: Does that include the
Oka Reserve?	[DOT]


Arthur Meighen: Yes.


Joseph Arthur Calixte Éthier: Is there a specific item for the Oka Reserve in regard to relief, medical attendance and medicines, out of the $42,700 mentioned?


Arthur Meighen: The doctor's salary is
specified, but there is no specific appropriation fo-r that reserve. This is divided amongst the reserves according to their needs.


Joseph Arthur Calixte Éthier: Does it cover the Indian
agent's salary?


Arthur Meighen: Yes.


James Alexander Robb: Some time ago, a complaint was filed by the farmers of the municipality of Chateauguay in regard to the drainage on the reserve, and I understood that the department was to send officers there to attend to the drainage if it was found that the Indians were responsible. Under the law of the province, they are required to attend to drainage on their property. I should like to know if this matter has been attended to.


Arthur Meighen: It is a fact that a complaint was received and that officers of the department went down. The report is to the effect that a very considerable sum would 'be required. The sum is not provided for in the Estimates, but the deputy minister informs me that he has the matter on his agenda to take it up with me at the earliest possible date.


Jacques Bureau: Are any officers' salaries provided for outside of the present item? I see that there is no item for salaries for Ontario and Quebec. There is no item for salaries for Manitoba, Saskatchewan, Alberta and the Northwest Territories, but there are items for Nova iScotia, New Brunswick, Prince Edward Island and British Columbia.


Arthur Meighen: The salaries and expenses of the agencies are all included under the item " General Expenses " of $51,875.


Jacques Bureau: How much is for salaries?


Arthur Meighen: I can give that in a
minute.


Jacques Bureau: What is the object in not showing salaries separately for the western provinces, except British Columbia, and Ontario and Quebec?


Arthur Meighen: We are just following
the custom that has come down to us through the years, so as to make the Esti-
	f
mates more easily comparable with other years.


James Alexander Robb: With reference to the drainage at Caughnawaga, I gather from the minister's statement that the report of the officers who were sent down there is to the effect that drainage is required and that the department recognize their responsibility for the drainage. It is perhaps a little too late to have the drainage attended to for the spring seeding this year, but the same trouble will arise again this fall and next spring. Does the minister hope to have that drainage attended to during the summer so as to prevent the land in the adjoining municipalities being flooded through neglect of drainage on the Indian reserve?


Arthur Meighen: I did not say that the report fixed responsibility upon the Indian Department, but that it was to the effect that were we to take care of the requirements a large amount of money would be involved. I said that the deputy minister had a note made to consult me on the subject at the earliest possible date. There is no item in the Main Estimates for drainage. As to whether there is an item in the Sup-plementaries I cannot say. Indeed, the subject has not been directly discussed with me. We are constantly in receipt of claims that the Indian Department should do this and that because there is a reserve in the district, but there are not many of these claims that are acceded to. This may be one that we should accede to, but I could not give any statement now as to whether it is such an one or not.


Rodolphe Lemieux: I wish to take this opportunity of publicly thanking the minister and the officials of the department for the work they have done at Caughnawaga. I am interested in a way in the little hospital which was founded down there at Caughnawaga by a pious lady who gave up her little savings for that purpose in order to give some relief to the poor Indians. She bought a building on the reserve, but, unfortunately, according to the laws of this land, in spite of the money she spent she cannot be declared the proprietor of that hospital building because the land belonged to the Indians and the Indians are the wards of the Government. At all events, the property is there and the hospital exists, and an excellent arrangement has been made by the department by which this elderly lady with her companions are giving the poor Indians the hospital service

which one might expect in a civilized community. I understand that the department is well satisfied with the services rendered by these good ladies, who receive no remuneration whatsoever. I would ask the minister to send at the earliest possible moment one of the department's experts who look after these institutions down to Caughnawaga, because there are some repairs needed at that hospital. They will entail an expenditure of about $2,000, not more, and with that expenditure this hospital which has been of such service to the Iroquois of Caughnawaga would be made up-to-date. Of course, the good ladies are doing all this work gratis, and as I said, although the building has been paid for out of their own savings, when they pass out of this life it will revert to the department and the Indians. So by making this small advance of $2,000, to be spent under the direction of the officers of the department, the department will in reality be working for itself and the Indians.


Arthur Meighen: I may say on behalf of the deputy minister that I appreciate the words of the hon. member. The appropriation per diem has been adjusted on a satisfactory basis, and on that account it is not the intention of the department to bear the expense of the repairs that are necessary. I am informed that a letter has been received from the hospital authorities intimating that they are prepared to spend $1,200 in improvements, and the department contemplates assisting them to the extent of $400, which is expected to be sufficient to meet present requirements.


Rodolphe Lemieux: Will my hon. friend
send Mr. Cheney down there at the earliest possible moment?


Arthur Meighen: Yes. I can now give
my hon. friend (Mr. Bureau) the salaries for Ontario and Quebec. The amount is $19,370.


Jacques Bureau: How much for each province?


Arthur Meighen: I will give that in a
minute.
Indians-Manitoba, Saskatchewan, Alberta and Northwest Territories, $556,414.


Charles Gavan Power: May I ask why special treatment is meted out to one tribe of Indians? The Sioux get $7,545., Why should they be singled out from the other tribes?


Arthur Meighen: Because they are nontreaty Indians.


Charles Gavan Power: They have no reserve?


Arthur Meighen: They are not natives of Canada. They came from the United States, and consequently are not included in the treaty arrangements.


Samuel William Jacobs: They are aliens.


Charles Gavan Power: Alien Indians.


Arthur Meighen: They are not aliens, but they are non-treaty Indians, not being originally natives of Canada.


Jacques Bureau: Again in this item I see a quarter of a million dollars under the head of "general expenses." The item of salaries for Ontario and Quebec, the minister said, was $19,000 odd, while the item under general expenses, which includes salaries, is $51,875. As to the western provinces, how much of this item iotf $259,000 under "general expenses" is for salaries? There is quite an enumeration here-implements, tools, etc., field and garden seeds, livestock, supplies, for destitute, hospitals and medical attendance, triennial clothing, surveys, grist and saw mills. Unless the salaries are very high, that leaves quite a big margin unaccounted for under "general expenses."


Arthur Meighen: The salaries in that item of $259,006 account for $136,155, rations $37,365, fuel, feed and light $17,536, livestock $15,000.


Joseph Arthur Calixte Éthier: There is a separate item *for livestock.


Arthur Meighen: That is for driving
horses for the agents. Equipment $9,073, buildings 13,906, miscellaneous $43,471. That makes up the total.


Jacques Bureau: What does miscellaneous cover, anything and everything?


Arthur Meighen: Usually it covers travelling expenses of agents, up-keep of motors, ice, telephone expenses, telegraphing, postage, stationery, etc., in all agencies in these provinces.


Jacques Bureau: What is the Indian population of the three provinces?


Arthur Meighen: It totals 34,348 inclusive of 3,769 in the Northwest Territories. Manitoba has 11,935, Saskatchewan, 9,962 and Alberta, 8,682. The total number of reserves is 218.


Jacques Bureau: Manitoba has the largest number?


Arthur Meighen: Yes.


Daniel Duncan McKenzie: What is the situation
of these Indians? Are they earning any-

thing, or do they depend entirely upon the assistance they get from the Government? I should imagine that they ought now to be in a position to help themselves to a great extent.


Arthur Meighen: They not only help themselves, but they are practically self-sustaining. With the help which the department gives them, not financial hut supervisory, they are almost self-sustaining. The Indians of these provinces are not so far advanced toward maturity of citizenship as, generally speaking, the Indians of the eastern provinces are. They have been in contact with civilization for a less number of years, but they keep gradually improving and those who graduate into citizenship and get away from the reserves and get on their own responsibility very rarely fail. That is a remark of some importance in connection with the legislation that will be before the House later on. The great difficulty is the tendency to keep to the old habits in the reserve. When they get away on their own responsibility-of course they should not be put there too soon-they rapidly, and in most cases certainly, make good citizens. In the three provinces they are virtually selfsustaining, with the supervisory assistance which they get at considerable expense from the department. ,


Samuel William Jacobs: Have these Indians been
thoroughly Christianized?


Arthur Meighen: Inasmuch as that work is not distinctly ours I am not ashamed to confess that it has not been quite perfect.


Samuel William Jacobs: It is the Lord's work.


Arthur Meighen: It is largely in charge of the missionaries of the various churches, who have succeeded to a substantial extent, and I must say that the whole Indian administration of Canada would be far from the success it is to-day were it not for the co-operation of the evangelical churches. There is no doubt about that. Not only would the expense be much greater to the Dominion, but the character of the work could not be of the same advantage to the Indian if we did not have that co-operation. The work that is being done by the evangelical churches in all the provinces is very considerable indeed and very burdensome to those churches, and to them Canada in that respect is unquestionably under a debt of gratitude.


Samuel William Jacobs: Does the minister include the Roman Catholic church?


Arthur Meighen: Certainly; there is no church more active in the work than the Roman Catholic church.


Samuel William Jacobs: How is the work on these reserves apportioned to the Methodists, the Baptists, the Presbyterians, etc.? How do they divide up the poor Indian?


Arthur Meighen: The Anglican, the
Presbyterian, the Methodist and the Roman Catholic are the chief bodies which do this work. They all have their respective spheres, and the policy of the department is to delimit those spheres of activity so as to avoid overlapping and a consequent additional expense. They all agree to that and work along those lines. As a rule they are not situate side by side at some point competing with one another for proselytes.


Samuel William Jacobs: In that respect they differ from the vihite man.


Arthur Meighen: I am speaking of ihe
churches.


Samuel William Jacobs: The churches in their
treatment of the Indian differ from the white man, civilized, so-called, in the matter of overlapping.


Arthur Meighen: I have not experienced any embarrassment from the competition myself. I do not know that there is such a difference.


Daniel Duncan McKenzie: The hon. member for George Etienne Cartier ()Mr. Jacobs) is evidently looking for the Mosaic dispensation but I do not believe he will find a very strong footing among the Indians. I am glad to say that in the province I come from we have quite a number of Indians. They receive very little support but they are very religious indeed-highly religious. Training in religion was given by the Catholic missionaries who went through the wilds two hundred years ago teaching the Indians, and it is to the credit of the Indians that they have never in the slightest degree departed from the early teaching which they received. It would be a curiosity to see amongst the Indians of the Maritime Provinces anything but a Roman Catholic.


Samuel William Jacobs: In answer to my hon. friend let me say that I am not looking for a sphere of influence for the Mosaic dispensation as he seems to infer. If I were doing so I would be looking for greater mentality than is shown by the poor Indian.


Mr. JOHNSTON:: T would like to ask the minister if there is an amount in the Estimates for building a new school on the

Gordon's Indian reserve in the province of Saskatchewan.


Arthur Meighen: No.


John Frederick Johnston: If that is the case I feel it my duty to bring to the attention of the minister some correspondence I have had with the principal of that school with respect to the condition of the school and the need for a new building there. In the spring of 1918 I received a letter from the principal of the school asking that I should have this matter brought to the attention of the Government. The war being on, I replied to the effect that I did not think it would be possible that the Government would take it into consideration at that time and I did not feel like asking them to do so1. During the past winter I again received a communication from the principal of the school outlining the need of a new building. The letter reads in part as follows:
Gordon's Indian Boarding School,
Punnichy, Saskatchewan,
February 3, 1920.
Sir,-Permit me to call your attention to the following facts :-
(1)	The main building of this School was erected of prairie stones, about the year 1892, and consisted of a basement divided into kitchen, dining-room, pantry and cellar so called.
The ground floor is subdivided into an office, a sitting room, a girls' wash room, and a room used for a sewing room; also, a boys' playroom, and a wash-room, all of which are too small.
The second floor furnishes two dormitories for girls (large and small girls) and three staffrooms.
Prior to 1914, two years after I was appointed principal, no drainage had been provided, although the building was situated at the foot of a slope, and the water, when it rained soaked into the basement, and undermined the walls, which settled, and made the building so unsafe that heavy iron rods had to be run from one wall to another, opposite to keep them from falling apart.
(2)	In 1913, the department proposed to add a lumber story to the present stone structure, and a concrete addition to the rear, and plans were sent me for approval, but the Indians, on hearing of the project became alarmed, lest the additional weight would cause the collapse of the old building.
In 1914, plans for a new building on a larger scale were prepared, and sent for approval; the proposed new building was to be erected immediately in front of the old one, which was to be utilized for different purposes; tenders were to be advertised for at once, and the new building completed by October of that year.
That was in 1914.
In 191/5 the Government had a frame addition added to the rear of the old structure 40 ft. x 18 fit., the ground floor of which is used' for a class room, and the second floor for a boys'
dormitory. This addition enabled the department to increase the number of pupils from thirty to fifty.
In 1910, the department provided for the building a laundry, a small frame structure, but no reservoir was added, and not even eave-troughing was supplied.
(3)	The condition of the old building, ever suitable for an Indian school, should engage the attention of the Department. The floors are worn out, the basement, so long without drainage (up to 1914), is unsanitary, the window frames are decayed, the roof leaking, the chimneys unsafe; there is no heating system, eleven stoves have to be kept up, there is no water supply, water for laundry, baths and scrubing, having to be drawn from a lake two miles distant, about fifteen barrels a week; water for cooking from a well half a mile distant ; there is no room in building for isolation of a pupil suffering from any infectious or contagious disease, a staff-room having to be given up for that purpose when occasion requires.
During the Flu epidemic in 1918, there were fifty-one pupils lying ill in the dormitories, and there was not one sanitary closet in the building ; a man had to be hired to empty pails and disinfect them., from the boys' dormitory, and the ladies of the staff, in addition to nursing and care of the sick, had to do this work in the girls' dormiitories.
In order to keep the school going, I have expended all that could be spared from farm and W. A. receipts in improving conditions. I have had a frame granary built, .at a cost of $400 ; a storehouse, at a cost of $200, an extension of the 1915 addition connecting it with the main building and thus providing another staff-room, at a cost of $3'00 ; and in general repairs have expended' upwards of $300, some of my small salary from the Diocese having been used from year to year in this way, always looking forward to improved conditions.
It is a shame to deprive the Indian children whom we cannot accommodate of their opportunities, and it is an outrage to expect ladies of education and refinement, who, having devoted themselves to the work, were sent here by the Woman's Auxilary, to continue year after year working under such conditions as I have brought to your notice. As a Canadian, familiar with western life since 1884, and more or less in touch with Indian work, I cannot regard with complacency the fact that such a small matter as the expenditure for an Indian school should prove to be such an insurmountable obstacle to the Government of Canada.
I beg to ask you, sir, for a definite answer, as to whether or not the new building for Gordon's School will be provided this year?
An average of at least eighty children can be maintained as soon as the accommodation is provided; we are constantly refusing applications, and do not feel justified in having the full number authorized by the department, in view of our experience last year during the epidemic.
The new building should include infirmaries for boys and girls, unless the department contemplates utilizing the old building, as the commissioner suggested, for hospital purposes, with provision for a trained nurse.
iSome few weeks ago I placed a question pertaining to this matter on the Order Paper. The question dealing with this particular matter was

Is it the intention of the Government to erect a new school 'building' on Gordon's Indian Reserve, Saskatchewan, this year?
The answer to that question was
Final decision has not been made.
A year ago last winter, during the epidemic of influenza, there were some fifty cases in the school and they did not have a spare room for isolation of cases of this kind. There were three deaths from this disease. iLater on they had an outbreak of typhoid in the school. I have here the report of the Inspector of Schools for the province of Saskatchewan addressed to the Bishop for the district. It reads as follows:
Sir,-Through the courtesy of the principal I inspected the above school, and am pleased to report on the good order and excellent discipline throughout the school generally. The kindly Christian spirit prevailing is very evident, as also the cordial1 relations between the pupils and the staff.
On inspecting the work in the schoolroom I found the pupils well up in the different grades, comparing very favourably with the pupils in the public schools. Miss Elizabeth Atwater, the teacher, is doing excellent work, and I have recommended her to the Department of Education for a Permanent Certicfioate.
As one interested in Indian work I would call the attention of your Lordship to the fact that the buildings and equipment are quite inadequate for the purposes of the school. The school at present is filled to capacity, yet I am credibly informed that the number without any special effort could be increased from fifty to eighty.
That is a point that ought to have some weight with the minister and with the committee. This school building, besides being unsanitary, is wholly inadequate to accommodate nearly all the children who desire to attend. There are other reserves close to the Gordon's reserve without school buildings 'and the children from these reserves would attend this school if there was room to accommodate them. These children are growing up without a chance of getting an education.
This means that many Indian children on the neighbouring reserves are being deprived of the opportunity of a Christian education, thus growing up in ignorance-a menace to the common weal.
The danger of Are In the present building, lighted as it Is by kerosene lamps and heated by stoves and without an adequate water supply is very great. It is providential that no tragedy has so far occurred. The Federal Authorities should be vigorously informed that a new and up-to-date school building is absolutely necessary for the carrying on this important work.
All of wihioh is respectfully submitted.
Tours faithfully,
J. G. McKechnie, Inspector of Schools.
This matter has become one of local interest in that district. The people in the adjacent towns know the condition of this school, know that the principal and staff are giving excellent service, and doing all they can under the circumstances with a building that is not fit for school purposes 'and not large enough to accommodate the children who would otherwise attend it. I think the minister should give the committee some assurance that while provision has not been made in the Estimates, a sum sufficient to provide a new building will be placed in the Supplementary Estimates. An amount was placed in the Estimates in 1914 but the work was never carried out. The war intervened, and nothing has been done up to this time. I hope the minister will be able to give the committee some assurance that the work will be looked after this year.
(Mr. MEIGSHEN:	The school to which
the hon. gentleman (Mr. Johnston), refers, is not the property of the department. It is the property of the Church of England and is conducted by them. The direct obligation of the department is to provide the measure of sustenance per pupil that we provide generally in such oases.
That is done in this ease. It is true that the church is anxious that we should take over the capital proposition and build a new school. I fear the letter the hon. member has read is not a very recent one. As regards the description of the lighting system as being coal oil lamps, I am informed that , the department has replaced that and has installed-


John Frederick Johnston: It is so stated in a letter of February 3, 1920.


Arthur Meighen: Since that date the department has installed the Delco electric lighting system in the school at its own expense. It is true that other things are not modern and a new school would be much better, but I am by no means convinced that there are not others in a similar position. It is our intention to have Mr. Graham, the commissioner in the West, visit the school very shortly and report on its present condition. I cannot make any statement as to whether an item can be placed in the Supplementary Estimates this year or not.


John Frederick Johnston: Am I to understand that the department will, in no case, build schools on these Indian Reserves?


Arthur Meighen: I did not say that.


John Frederick Johnston: I know very well that you did not say so.


Arthur Meighen: The church owns the school. If it were our school the obligation upon us to keep it in repair, or to rebuild it, would be much more immediate and direct than is the case when it is a church school owned by the church. Of course we sometimes do take over a proposition when the church is not able to carry it out, and build a new school which would be our property; but we cannot be held directly responsible for the maintenance of a school which is not our own. Now as to when we may be able to take this school over and reconstruct it I cannot say. I believe an estimate was submitted to the department with that intention at a time when we had far less obligations on our backs than we have at the present time. We want to treat all alike as nearly as possible. We are building one Anglican school, one that was much more necessary, according to the information at our hands, than was this one. We try to distribute these schools amongst the various denominations having regard to the immediate necessity of the case and just as fairly as possible.


John Frederick Johnston: With the permission of the committee I desire to place on record a telegram which I received a couple of days ago ficin the Archdeacon of that diocese. It reads as follows.
Regina, Sask., 4th June, 1920.
J. P. Johnston, M.P.,
House of Commons, Ottawa.
The Synod of the diocese of Qu'Appelle in Synod assembled desires to place on record its sense of the serious situation created in our Indian work by the delay of the Government in building Gordon's Indian Boarding School at Punnichy for a period of over six years. In view of other buildings having been built during that period the Synod feels that a great injustice has been done to this diocese and to the Indians. The Synod therefore expresses to the authorities of the department the hope that this matter will receive immediate attention and that the contract will be let and the building erected at once.
Archdeacon Knowles,
Sec'y. of Synod, 1611 Sixteenth Avenue.
New it seems to me that the department must have considered doing something in the direction of taking this property over and looking after it, when it placed an item in the Estimates for 1914 providing for the erection of a new building there.


Arthur Meighen: Just before closing the matter I might suggest to the hon. member that he take the subject up with his leader (Mr. Crerar) who has been urging in rather mandatory tones a most ruthless reduction 208
ir. these Estimates. I think his missionary work might very well be done there as well as with the leader of the Opposition (Mr. Mackenzie King), to whom he gives pretty good support, who makes the same demand.


John Frederick Johnston: 
Arthur Meighen: I did not intimate that the leader of the hon. gentleman had' his hands on the purse strings. I only intimated that he is crying out to the Government to out these Estimates down. We cannot cut them down and raise them by the same stroke. The hon. gentleman himself is also pretty strong on economy, but I see that his principles are Changed when the matter is one which affects his own constituency.


John Frederick Johnston: My principles are not changed at all. I stand for economy, and I Claim we could easily pare enough off the other Estimates to erect this school building.


Donald Nicholson: Perhaps while this matter is being discussed I might say a word to the committee that would throw some light on this question in direct relation to what is known as the Gordon School as well as many other schools of like character. I happen to have the privilege of being a member of the committee that has been working on matrevised edition

ters of this nature indenominationally for the past ten or fifteen years, and I know something of the situation in connection with the Gordon School as well as many others. What happened, perhaps a decade or two decades ago, was that different denominations went into different sections of the country and erected school buildings rather indiscriminately, the Anglican church, of which I happen to be a member, along with the rest. The result was that we have a number of schools in locations where schools should not be, and there are many locations where schools should be where we have none. It is true that provision was made in the Estimates in 1913 or 1914 for the Gordon School. Provision was made at the same time for other schools within the Anglican communion, and I understand within other communions. But the war intervened and made it necessary for the Government to cut out these buildings. Now, my information is that the department is again beginning to take care of the most emergent cases. At the present time correspondence is passing between the different communions-Homan Catholic, Anglican, Presbyterian and Methodist-with a view to reaching a common view, so to speak, as to jus't the locations where the schools should be placed from one end of this country to the other, and to put that whole comprehensive scheme before the Government so as to get the whole Indian, population into the position that will enable them to get the education they, should have. I sympathize with everything that has been said in the correspondence that has been read by my hon. friend (Mr. Johnston) from the principal of the Gordon School, from the Inspector of Schools, and from the Archdeacon of the Diocese of Qu'Appelle, but I also know that the Missionary Society of the Anglican Church has represented to the department that there are still more urgent cases within their communion, without saying anything with regard to other communions. A situation has arisen, for instance, on the Black-feet reserve that demands immediate attention unless the whole tribe of Indians is going to he wiped out on account of tuberculosis and other ills of this character. The bodies that a\e dealing with these Indian schools- industrial schools, in the main-are endeavouring to push the Government ahead as fast as possible, but they feel that having regard to the conditions with which the country is faced to-day they cannot expect the Indian Department to go ahead very much faster than 
it is going. As the minister has stated, they are erecting one new school which has been recommended by the Missionary Society of the Anglican church and they are erecting others for other denominations and providing additional per capita grants to take care of them. There is no larger question than this before the people of this country to-day, and it will continually get larger. Without doubt, within a short time, Parliament will he called upon to vote more money than it is voting now if the Indian population is taken care of as it should be.
I thought that it would be well to give the committee a general idea of what this school situation is, as I have had the privilege of studying it from the inside, so to speak, in conference and in conjunction with the interdenominational bodies that are endeavouring to carry on this work. Bight here may I say that in many cases the indian Department are erecting the building, providing the per capita grant for the maintenance of the children at the schools, and the missionary bodies of the different communions to which the Indians belong are carrying on the practical work of education. I am sorry that my hon. friend (Mr. Jacobs) is not here at the moment; I heard him make a remark that I feel disposed to resent. Perhaps he said it thoughtlessly, but he remarked that if he was going to undertake the work of proselytizing any particular class of the people he would go to a class with a higher mental capacity than that possessed by the Indians. Well, I suggest to him that he will have to go somewhere else than to Central or Eastern Europe to find that class. The native Indians of this country, given a fair chance, will make just as good citizens as any other men, white or black, that come within our borders.
Indians-Nova Scotia-salaries, etc., $28,300.


Jean-Joseph Denis: How many Indians are
there in Nova Scotia?


Arthur Meighen: There are 2,031. Number of reserves, 45.


Daniel Duncan McKenzie: How many superintendents are there?


Arthur Meighen: Just one, Mr. A. J.
Boyd, of River Bourgeoise, salary, $1,800. The salaries of the other agents are in amounts like these: $100, $150, $200, and so on, reaching a total of $4,400. These small salaries are not on any maintenance basis; it is simply an allowance for the work done.


Daniel Duncan McKenzie: il think there are four schools in Cape Breton; is there a teacher at each of them this year?


Arthur Meighen: There are fourteen day schools in Nova Scotia, of which five are in the island of Cape Breton. The number of pupils enrolled in Nova Scotia is 255. The day schools on the island are at Sydney, Eskasoni, Middle River, Salmon River, and Whycocomagh.


Daniel Duncan McKenzie: There was a school at a place called Malagawatch, but I think it is closed this year.


Arthur Meighen: The attendance could not be kept up at that point. The school was not successful and it has been closed.


Daniel Duncan McKenzie: As a result of an investigation held some years ago it was decided, I understand, that the Indians in the neighbourhood of Sydney were to be removed to some other location and that the lands were to be taken over by the Government. What has been done in that connection?


Arthur Meighen: It is the intention of the Government to move these Indians. I intend to submit to my colleagues an estimate for the purpose. If approved, it will be in the Supplementary Estimates.
Mr. McKENZIEl: Has any place been decided upon as the new location?


Arthur Meighen: Not yet.
Indians-New Brunswick-salaries, etc., $19,284.


Mr. LEGER:: Application was made by the Indians of Big Cove, New Brunswick, for a small grant to assist them in the building of a bridge. Is there anything in the Estimates in that connection?


Arthur Meighen: I believe that without any special appropriation to that end we .shall be able to build the bridge. My information is that the officers of the department favour its construction.


Auguste Théophile Léger: How many Indians are there in New Brunswick?


Arthur Meighen: There are 1,846.


Jean-Joseph Denis: How many reserves?


Arthur Meighen: Twenty-six.


Auguste Théophile Léger: There is a school building at Big Cove; is it in operation?


Arthur Meighen: I think it is.
Indians-Prince Edward Island,-salaries, etc., $3,225.
Mr. McliSAAC:	How many Indians are
there in this province and how many reserves?


Arthur Meighen: There are 292, on two reserves. The salaries amount to $750, an increase of $150 this year. The miscellaneous item is $150 less than last year, so that the total estimate is exactly the same.
Indians-British	Columbia-salaries,	etc.,


Mr. PECK:: I should like to ask the
minister if the Indian .agents will participate in the advantages of the Civil Service re-classification and what their salaries will be. Hitherto their salaries have been extremely small.


Arthur Meighen: famous missionary, Father Duncan, established English church missions along the whole seacoast. Later on the Methodist church with characteristic enterprise, took over two or three fields. But I can say from personal knowledge that there has never been any animosity or trouble between the various churches; in Northern British Columbia, they simply look after the Indians in their own areas, and they do not bother proselytizing in other areas. In that regard I wish to, commend very strongly the 'people iwho have done so much in the way olf missionary work in Northern British Columbia.


Arthur Meighen: The number of Indians in that province is very large, viz., 25,698, and there are 890 Indian reserves there.
Indians-Yukon-relief, medical attendance and medicines, and general expenses, $15,000.


Daniel Duncan McKenzie: How many people besides Indians are there in the Yukon?
Mr. MEI'GHEN: In the Yukon, there are a large number of good, very intelligent people, judging from the election.


Daniel Duncan McKenzie: I am not questioning their intelligence; I want to know the number.


Arthur Meighen: I have not the population of the Yukon before me, but I should think it was in the neighbourhood of about 4,300.


Jacques Bureau: Indians?


Arthur Meighen: No, Whites and Indians.


Daniel Duncan McKenzie: I am not speaking disparagingly of the Yukon; but from the report made about a year ago while we were making some adjustments of courts, I understood that the population was very small.
Indians-general,
Payments to Indians surrendering their lands under provisions of section 89 of the Indian Act which will afterwards be repaid from the
avails of the land	$ 25,000
Relief to destitute Indians in remote.
districts	 05,0 00
To prevent spread of tuberculosis..	10,000
Printing, stationery, etc	 5,000
Grant to' assist Indian Trust Fund
Account 310, suppression of liquor.	3,000
To provide for expenses in connection with epidemic of smallpox and
other diseases	 10,000
Surveys, Ontario, Quebec and Maritime Provinces	 3,000
To provide an amount to pay agents' fees in connection with registration, of births, deaths and marriages..	1,500
General legal expenses	 <5,500
Total	$128,000


Mr. MOLLOY:: What are the provisions of section 89 of the Indian Act?
[Mr. Peck.l .


Arthur Meighen: That is the provision
that enables the surrender of land for sale upon such terms as provide for the payment of a percentage of the proceeds to the individual Indians. This is an appropriation to do that.


Mr. CAHILL:: An Indian reserve in Ontario was surrendered some time ago. Was the transaction completed, or is it still hanging 'fire?


Arthur Meighen: A surrender of a reserve or part of a reserve occurs about once a week in Ontario. Does the hon. member remember what Teserve this was?


Frank S. Cahill: At Sarnia.


Arthur Meighen: I am informed that the purchase has not yet been completed. The money is not yet paid.


Frank S. Cahill: It is being held for purchasers until what time? Until such time as they choose to pay for it? What are the general conditions governing a sale of that kind?


Arthur Meighen: The Indians have surrendered the reserve. We are not holding it at all. If the prospective purchasers go through with the purchase, all right, they get the land; if not, they do not get it.


Frank S. Cahill: The Indians have surrendered it to whom?


Arthur Meighen: To the Crown for purpose of sale.


Frank S. Cahill: How long will the Crown hold it if they are not paid for it?


Arthur Meighen: Until they sell it.


Frank S. Cahill: That might 'be fifty years.


Arthur Meighen: It might be. We cannot make anybody buy it, but we have to sell it in accordance with the terms of the surrender. We have no reason to think the company-it is a steel company, is it not- some company that is establishing a big industry there-is not going ahead with the purchase; hut if it does not, of course it will not get the land, and the land will be available for somebody else.


Frank S. Cahill: What are the terms of the surrender?


Arthur Meighen: I have not the terms
with me. They are very lengthy, and I shall be glad to lay them on the table of the House if the hon. member so desires. The Indians of that reserve are a very intelligent class of Indians; they have a very shrewd knowledge of their business, and

they looked carefully after their interest in fixing the terms of the surrender.


Frank S. Cahill: If the minister -will put the terms on the Table to-morrow, that will be satisfactory.


Daniel Duncan McKenzie: In this appropriation there is an item of $10,000 to prevent the spread of tuberculosis. I am sure that throughout Canada a great deal of sympathy is felt for the Indians on account of the ravages that tuberculosis and smallpox are making amongst them. I was going to suggest to the minister that this is a possible opportunity of handing over this branch of the work of the Indian Department to the Health Department, unless that has been done already. I do not know that there is any phase of the work of the Health Department that is more important than that of making proper provision for the health of the poor Indians. I understand that frightful ravages are being made amongst them by tuberculosis, and their conditions of life are certainly not such as to preserve them from the ravages of that deadly disease. I should be pleased to know that at the earliest possible moment that that branch of the department was going to be transferred to the Department of Health and that proper steps would be taken to look after these Indians. I am sure that even though we are striking hard for economy now, if more money is wanted for this purpose the people of this country would be willing to spend it.


Arthur Meighen: The Health Department has no power to take over the matter of the health of Indians. That is not included in the Act establishing that department. It was purposely left out of the Act. I did not think, and I do not think yet, that it would be practicable for the Health Department to do that work, because they would require to duplicate the organization away in the remote regions where Indians reserves are, and there would be established a sort of [DOT] divided control and authority over the Indians which would produce confusion and insubordination and other ill effects among the Indians themselves. However, we get every possible assistance from the Health Department. The deputy minister advises me that Dr. Amyot, the Deputy Minister of Health, and his officers have been enthusiastic in their co-operation- with the Indian Department in connection with the recent ravages and health matters generally.


Daniel Duncan McKenzie: I am not so much concerned, nor are the people of this country, as to which department does this work,
as that it be done. I am not speaking for myself but for a great body of Canadian people.


James Hamilton Ross: What is the policy of the department in regard to the employment of medical attendants for the several reserves throughout the country? Is the policy the same in every province? If not, what is the policy in regard to this matter in the province of Ontario? Are the medical men who are employed paid fixed salaries? Who appoints them? Upon whose recommendation are they appointed, and what is the policy generally?


Arthur Meighen: They are usually,
though not always, paid a fixed salary. It depends upon the circumstances, the amount of work there is to do, and the availability of a man to do it. There may be a man available whom you can get to do the work incidentally, and not a man available whom you can get to do the work on salary. These two factors control. The Civil Service Commission in every case appoints the salaried men.


James Hamilton Ross: These medical men?


Arthur Meighen: Yes.


James Hamilton Ross: Since how long?


Arthur Meighen: Since the Act came into effect. There is no patronage.


Jacques Bureau: The second item under
the head of " General " is " relief to destitute Indians in remote districts, $65,000." There is a similar item for all the provinces where provision is made for the Indians. For Ontario and Quebec I find an item of $42,700 for "relief, medical attendance and medicines," and for Manitoba, Saskatchewan, Alberta and Northwest Territories an item of $149,000 for " supplies for destitute." Then there is an item of $11,000 for "relief in Nova Scotia, $10,000 for " relief " in New Brunswick, $13,000 for " relief and seed grain " in Prince Edward Island, and $22,000 for " relief to destitute " in British Columbia. Now I understand that in all the provinces except the Northwest Territories there is a regular organization to take care of these Indians. The remote districts would only be in the Northwest Territories, I presume, where the Indian population, according to the figures that have just been given, is only 3,369. Yet we find the sum of $65,000 allotted for relief to destitute Indians in remote districts. That relief work seems to be covered by item No. 263.


Arthur Meighen: Not exactly. This item is intended to look after the Northwest. Ter-

ritories and also Northern Ontario, Northern Quebec, Northern British Columbia, and the Ungava District of Quebec. There is no item under the provincial headings for these districts. In these remote regions the destitution is often severe and the cost of provisions very high, and it is necessary to vote this amount to meet the expenses. In the northern parts of Ontario and Quebec, particularly Quebec, the Indians have suffered extreme hardships owing to the failure of the fur trade, and distressing tales of suffering and hardship have reached headquarters. It is necessary to make provision for the hunting Indians. This vote applies to the districts where we have no agents.


Jacques Bureau: Lumbering operations
extend pretty far north in Quebec now, and I would think there would be very few Indians who would not be able to take care of themselves, right up to the lake St. John region.


Arthur Meighen: They are away north of there. In the Ungava district the 'Indians are stretched pretty nearly up to the Hudson Straits. I have had a talk with the Rev. Mr. Walton, who has lived among the Indians for many years, and the tales of distress he brings are really excruciating. The difficulty is that the caribou or rein' deer, upon which the Indians live-these are hunting Indians-were either destroyed or driven farther east and south by the great fire about thirty-five years ago. Owing to the virtual extinction of that source of supply, the Indian has not had means to sustain himself, and he has become more and more inclined to get into tents and huts and depend upon assistance from the department and the Hudson's Bay Company, and the like. In that way his health has deteriorated. We are now attempting to establish some reindeer herds up there to give them employment that will keep them outside, and provide them with food at the same time. I only rose to say that the Indians to whom this vote applies are farther north than the hon. gentleman has in mind. I cannot give the exact details as to where each dollar went, but that will be found in the Auditor General's report. The actual expenditure for the year 19171918 was $85,577.35, and for 1918-1919, $65,286.67, or about $20,000 less than the year before.


Jacques Bureau: How do these cases come to the notice of the department, and how are they taken care of?

(Mr. MEIGHEN: Through traders, the Northwest Mounted Police, and the Hudson's Bay Company.


James Hamilton Ross: Can the minister tell me what was paid in the last fiscal year to the medical attendant for the Indians in the south part of Middlesex, at Muncey? How much was paid in salary, and how much in extras, if any? If there is more than one attendant, who are they?


Henri Sévérin Béland: I see under the head of "general" an item of $10,000 to prevent the spread of tuberculosis. Would the minister tell me-I was not present earlier in the evening-how this money was spent? Is it paid to physicians who go to the reserves? Are there sanatoria in different parts of the country where the Indians who are supposed to be suffering from tuberculosis are received and treated?


Arthur Meighen: This money is spent in the providing of hospital treatment for those who can avail themselves of it, and also' in providing methods of sanitation, the destruction of infected houses, and rebuilding to combat the spread of disease. There was spent in 1916-17, $10,792.19; in 1917-18, $10,196.35; and in 1918-19, $13,498. Wherever possible the Indians are taken to hospitals.


Henri Sévérin Béland: Is tuberculosis increasing or decreasing among the Indians, or is it stationary?
!Mr. MEIGHEN: I am afraid 'I cannot give a very encouraging answer to the question. It is the one dread disease of the Indian. We are not convinced that it is increasing, but it is not decreasing.


Mr. GAUVREAU:: 
Arthur Meighen: I shall take into consideration the observations of my hon. friend. There would be an advantage in having the agent at Riviere du Loup.
Mr. McGIBRON (Muskoka).:	What
power has the Indian agent or the medical adviser to order treatment in a case of tuberculosis breaking out among the Indians?


Arthur Meighen: The agent has no final power in himself, but the Superintendent General, under the Act, has power to make an order authorizing the placing of any infected person, or any person who should be treated in a hospital.	,
Mr. McfGIBBON (Muskoka):	What
would the medical attendant have to do in the matter?


Arthur Meighen: He would simply report by wire or letter to the department at Ottawa iand get an order. An hon. member asked for the name of the medical attendant at Munsees, and his salary. His name is Dr. W. H. Woods of Mount Brydges, and he attends the Chippewas, the Munsees, the Oneidas of the Thames Reserve, and also all the pupils of the Munsees Institute. He is allowed a salary of $1,700 per annum, of which ,$250 is chargeable to school fund and $800 to band fund. There is no record here of any additional sums.


James Hamilton Ross: How many Indians are there on these reserves?


Arthur Meighen: I am informed that
there are about 1,200 or 1,500.


James Hamilton Ross: Does the medical attendant
get anything for extra attendance on individual Indians, or is that his full salary?


Mr MEIGHEN:: He gets something extra in the case of epidemics. I have given his regular salary. I have ho record of extra payments; in normal conditions this is all he gets.


James Hamilton Ross: Is his salary increased from year to year?


Arthur Meighen: No; it has been stationary for some years. I do not know what it would be under the re-classification.


Peter McGibbon: Is it the
intention of the department to sell the timber on the Indian reserve in Gibson,
and if so what disposal will be made of the money?


Arthur Meighen: In the case of that reserve, the department has been giving Indians permits to take out timber themselves. It has not been decided to sell the timber yet.
Indian education, $1,064,415.


Daniel Duncan McKenzie: In our part of the
country we find that the Indian's capacity for education is rather circumscribed. The Indian child is able to read and write pretty well and has a fair knowledge of arithmetic, but the teachers tell me that beyond that, in the field of English grammar, composition, history, etc., it shows an aversion to concentrated study. I should like to know how the Indians in the West get on, and what results are obtained from their educational training.


Arthur Meighen: As regards the day
schools in the West, I fear there has not been [DOT] any great success. The chief difficulty has been to get the Indian child to attend with sufficient regularity to make progress. The boarding school is the proper system of Indian education for Western Canada. In the boarding school I have never heard of any special class of subjects in which the Indians are deficient or in which, indeed, tney are not the equal of the white children, if they would attend with the .same regularity and give the same attention to their studies. I have discussed the matter very frequently with teachers in those Indian schools and they speak in the highest terms of the capacity of the Indian children as a general rule. But the great trouble is that just as soon as the child gets out his tendency is to revert back to the reserve. Those of his own blood are not earning their living out in the world and he has not his own class with whom he can associate outside; consequently his tendency is to go back to the reserve, and in a short time the value of his education is largely lost. That fact also has a bearing on the question of the wisdom of encouraging and enabling the Indian to the utmost extent possible, consistent with his own fitness, to be enfranchised and be out away from the reserve fighting his way in the world like other people. Undoubtedly, the education will help the Indian children when they come out of the Indian school for they will be equipped, so far as education goes, to make a living.


Jacques Bureau: A question was asked
by the hon. member for Last Mountain (Mr. Johnston) as to the appropriation for a particular school, and the letter which he read showed a pitiful condition of things in that school. Now, the amount we are asked to vote is $1,064,415 for 34,000 people.


Arthur Meighen: Over 100,000.


Jacques Bureau: The total population of
the Indians?


Arthur Meighen: Yes,


Jacques Bureau: Are these schools built
on the reserves? I had the impression the schools were on the reserves?


Arthur Meighen: 
Arthur Meighen: It is exactly the same
as last year, and certainly it is none too much; we would like to be able to afford more. There ought to be more Indian board-
IMr. Meighen.]
ing schools built and we would like to build the one in Last Mountain if we could afford to undertake it with the money in hand, as well as others equally urgent.
Mr. BUREAU!:	How many are there?
Take Manitoba where the population is the largest.


Arthur Meighen: 
Henri Sévérin Béland: Is the school at Qu-Ap-pelle a boarding school?


Arthur Meighen: It is an industrial
school. It really is a boarding school.
Mr. iBELAND: Is not that one of the bes-t Indian schools you have now?


Arthur Meighen: It is out of the Qu'Ap-pelle school that the File Hills colony has come. The File Hills colony is undoubtedly a phenomenal success. The number of day schools in the Dominion is 248, boarding schools 58, industrial schools 16, total 322. This is a vote for the maintenance of these schools.


Jacques Bureau: It is not too much.


Arthur Meighen: And for the construction of such school buildings as are contemplated for next year.


Jacques Bureau: And the maintenance of
the old schools?


Arthur Meighen: The maintenance of
the whole of them.


Jacques Bureau: Is it not possible to comply with the request of the hon. member for Last Mountain (Mr. Johnston) under the conditions existing there? It seems a pitiable state of things if the letter contains the truth.


Arthur Meighen: It was not altogether
right; it was not up to date in some respects.


Jacques Bureau: Out of this amount will there be anj^ money which can be used to improve the condition there?


Arthur Meighen: No.
Mr. B'UREAU:	Is there any other
amount which will be used for that pu -pose?


Arthur Meighen: No.


Mr. COCKSHUTT:: Before passing from the question of the education of the Indians, I would like to make a few remarks in regard to the Indians in the county of Brant. We have there the largest number

of Indians to be found on any one reserve in Canada, or in North America-I think about 4,500. The hon. member for North Cape Breton (Mr. McKenzie) raised a question about them being circumscribed in their education. I have been in very close touch with a good many of the Indians and I think that does not apply to this tribe. The Six Nation Indians are amongst the most intelligent, if not the most intelligent, on the North American continent and they are capable of a very fine education if they have the opportunity. I know that in several instances they have taken very important positions almost immediately after they have passed out of the public schools. I heard of one last week who entered on a commercial course and, just fresh from school, received a salary of $20 per week for her services. 'That goes to show that if the Indian has a fair chance he is capable of very substantial advancement. I would like to know if there is any fund, or whether there can be any fund, provided for those Indian boys and girls, who wish to push on beyond the common school and take a high school course. There are some few in our city who are taking the high school course at the present time. There has been a contention between the city and the county as to who shall pay the fees of these children coming in from the Mohawk institution and from the reserve and completing their course in the high school of the city. The city keeps up the high school and it is customary to charge * country pupils for the education they receive. It appears to me that if the department wishes to advance the education of Indian children there should be a fund provided that might be drawn upon in order that these boys and girls who have got as far as they can in the common school should have an opportunity of prosecuting their studies farther in the high schools of Ontario particularly. I am not sure that any fund of that kind exists; I have not heard of it. But I know that recently there has been quite a sharp controversy in the county of Brant on that very point. I would like the minister to say whether or not there is an opportunity for those who wish to take the higher branches that are taught in the high schools and collegiate institutes, where the parents are not able to pay the fees, and whether the department has a fund out of which it can pay a whole or a part of the expenses of those students while they pursue the higher branches of education. I feel certain that if these facilities were extended and if such a fund were provided, a
very large number of children on the Six Nations Indian Reserve would take advantage of it, and that a large number of them would take a place among the most advanced of the white population. I am sure they have the capacity to do that and we only need to look to what has been accomplished in the last generation for confirmation of my statement. One Indian at least became one of the foremost citizens of Toronto and received a salary of $12,000 a year as head of the Independent Order of Foresters.


Henri Sévérin Béland: Oronhyatekha.


William Foster Cockshutt: He was a well known Indian, a credit to the country and to the reserve from which he came. I mention that case in order that the committee may realize that there are sons of the soil among our own original population who are capable of the highest education. I certainly think that the department, if they desire to encourage higher education, should make it easy for these scholars who wish to press on from the common schools of the reserve or the country schools which they attend, and to go to collegiate institutes and high schools and that, if necessary, a fund should be provided to help them while they are passing through. I believe in many cases you will find that no inconsiderable number of Indians have made their way in the world by reason of the education they have received. I know several of them from our reserve that have gone to New York, and other great cities of United States, and hold very high positions indeed at very fine remuneration. I feel confident that the Six Nations Indian is capable of higher education to a considerable extent, and if the minister would give us assurances that they would be treated a little more liberally with regard to the fees in these higher branches of education I feel confident that more of them would take advantage of it.


An hon. MEMBER:: Have they got a vote?


William Foster Cockshutt: Some of them have the vote. I believe that of the number that went overseas nearly four hundred had the vote,. and that nearly all of them voted at the last election. That is a matter, though, that does not particularly concern myself as they belong to the North Riding of Brant. I am speaking now on behalf of the Indian, and I trust the minister will give that feature to which I have alluded his serious consideration so that those Indians who desire to pursue the higher

branches of education should be induced to do so.


Arthur Meighen: There are quite a number of Indians, particularly of the Six Nations reserve, fwho do desire and do obtain a high school education. With respect to that reserve, the Indian parents for the most part, are quite capable financially of supplying their children with that education, and as to them the department has merely encouraged the attendance of those children at school by awarding scholarships to help them through. But there are others, fewer in number, who are not in the same position, and in those cases the department has always sympathetically received any application for help, and a large number of pupils are being helped by the department in the securing of a high school education at the present time. The ear of the department has been sympathetic to the ambitions of any pupils whose parents are not able to provide them with the fees and the necessary books for the purpose.


Mr. BEST:: I realize that many of these Indians are capable of a very high education, but in view of the conditions in which the finances of the country are to-day I hope the minister will not for one moment think of laying aside tens or hundreds of thousands of dollars for any such purpose. I have brought to the notice of some of the departments instances where the parents of young wrhite men,-young men who went overseas and fought for this country-were poor and were not able to put their sons through the high school; these had to do the best they could to get through. Why then ehould we set aside hundreds of thousands of dollars to give higher education to young Indians when our own white people cannot put themselves through? I realize that many Indians went overseas and fought for the Empire and we ought to treat them just the same as we would any other class of people, but we are not in a financial position to do what has been suggested; and to my mind no hon. member should get up here and advocate that we pay out a lot of unnecessary money for this purpose. I believe in- fair play to every one in the Dominion, but I am also of the opinion that if we iwere to do more to assist our white people we would better serve the interests of our country. There is no doubt whatever that the sons of poor people are just as capable of learning els the sons of the rich; but in many cases they have to do without the education they need because they are not able to put themselves through. I hope the minister will

not for one moment consider laying aside hundreds of thousands of dollars for any such purpose as suggested.


William Foster Cockshutt: Who is asking for hundreds of thousands of dollars?


John Best: Well the hon. member advocated the expenditure of money for this purpose.


Mr. GOULD:: If the educational aspect of this matter is disposed of I would like to introduce another, which perhaps more particularly affects the Indian reservations in the West. I have at present in mind the White Bear reservation located on the southern slope of the mountains of Saskatchewan. It is tributary tp a large preserve on which wild game abounds, and I have wondered if the Indian, in a location such as that, is permitted to hunt all the wild gaane that comes there. I believe it is the custom, whether it is the law or not, and I wondered if the Dominion Government permits the Indian to do that, or whether it is a privilege granted by the Provincial Government.


Arthur Meighen: The Indian outside his reserve must comply with any provincial restrictions with respect to hunting or the preservation of game. The Indians have sometimes resisted the imposition of these restrictions by the provinces, but the policy of the department has been to get them to comply. On the reserve itself, I am disposed to think, the Indian is not so restricted, and his aboriginal rights to hunt in that reserve are quite free from any provincial law. I do not want to give that as .a final opinion, but that is my impression.
Government of the Northwest Territories- $7,000.


Daniel Duncan McKenzie: What is this money
used for?


Arthur Meighen: That is the entire
amount expended on the whole government of the Northwest Territories of Canada, an area I suppose as big as Europe. The Interior Department administers the whole territory for the sum of $7,000, and the minister does not make any extra charge.


Daniel Duncan McKenzie: What is the population?


Arthur Meighen: According to the census of 1911 it was 17,196. I doubt if it would he any more than that now. Owing to the extension of the provinces of Quebec and Ontario a deduction would have to be made, but the figures do not include all the Eskimos on the Arctic.


Daniel Duncan McKenzie: Are we providing for
the government of Eskimos?


Arthur Meighen: Yes.


Daniel Duncan McKenzie: Are we providing them with schools or anything of the kind?


Arthur Meighen: Yes, there is an item of $3,000 for schools included in the $7,000. It only takes $4,000 to govern them outside of the cost of the schools. Last year the appropriation was $8,000, so there is a saving this year of $1,000.


Daniel Duncan McKenzie: Where is the area embraced in the Northwest Territories? Is it the region between the northern boundaries of Alberta .and Saskatchewan and the Arctic circle?


Arthur Meighen: Yes, north of Alberta, Manitoba and Saskatchewan and south of the Arctic .ocean. The area is 1,242,224 square miles, two-fifths of the whole area of Canada, and a rich territory it is. Negotiations are now proceeding, which will almost certainly eventuate successfully, for the lease for commercial purposes of practically the southern half of Baffin's Land. It is a great mistake to assume that the area of the Northwest Territoriese is wholly -or, indeed, in any substantial degree- barren. The time will undoubtedly come when it will be a prized portion of the Dominion.


Mr.   M@: Have the Government taken any steps toward finding out whether there is oil in these regions?


Arthur Meighen: The Government, of
course, are not themselves prospecting for oil. The Geological Survey, under the Mines Department, has general charge of the geological investigations carried on throughout the Dominion. The regulations respecting oil throw the opportunity of prospecting and discovering open to every person, and many are availing themselves of the opportunity. In 1913-14 it was generally felt that we were on the eve of very great oil discoveries. There have been none yet of any major importance. T am not sure when these discoveries will be made or whether they will ever be made, but the prospects are indeed bright. I have no doubt that those engaged in the work anticipate that it will not be long before discoveries are made. The Government .are merely laying the scientific basis and in that way enabling these investigations to proceed along sound and sensible lines.


Peter McGibbon: Do you afford any assistance to those who are looking for oil?


Arthur Meighen: No; if they discover the oil they get their own reward. Very large sums of money have been spent in the search, but it has been private capital, not the capital of the Government. I believe that one company has already spent almost a million dollars, so far without success.


Peter McGibbon: The oil resources of the world are nearing exhaustion. Great efforts have been made by the British Empire during the last few years to secure a sufficient supply of oil for the future. I think it would be well if this resource were kept under Government control.
Government of the Tukon Territory-salaries and expenses connected with the administration of the territory, etc., $200,00'0.


Jean-Joseph Denis: What is the total population of the Yukon?


Arthur Meighen: I estimated it a few minutes ago at 4,300; I do not think I am very far out. Anyway, it is between 4,000 and 5,000.


Jean-Joseph Denis: This appears to be a large appropriation for a population of 4,300. Has a like appropriation been made each year for several years past?


Arthur Meighen: Oh, no, the appropriation that has been made yearly for several years past has been far more. In' the last two or three years the appropriation has been very much reduced, somewhat to the indignation, I fear, of the population of the Yukon. I did not feel that the numbers there warranted the expenditure that was being made. It is only a short time since the expenditure was twice the amount we are asking now. Of course, the Yukon is a very expensive territory to administer, owing to its location, its climate and the general configuration of the country. The roads are difficult and expensive to maintain; the whole administration costs much more than that of other portions of the Dominion. It will be seen that even this year there is a decrease in the appropriation of $15,500; the reduction last year over the year before was $190,000. The expenditure in 1910-11- ask the hon. member to note the year-was $303,674.94. The actual expenditure this year will doubtless be less than the $200,000 asked for in this item.


Jean-Joseph Denis: What was the population in 1910?


Arthur Meighen: Practically the same as now; possibly a little more.


Jean-Joseph Denis: Does the Government receive any revenue from that region?


Arthur Meighen: Yes, the Government gets a revenue in royalties; 'I will give my hon. friend the figures in a moment. But the country gets the benefit of a very large production there. The output of the Yukon -I speak from memory-is valued at about $4,000,000 a year, so that it is a territory of some importance. The output per capita is very high.
Mr. MicKiENZIE: Is there .any chance of making this territotry part of the province of British Columbia some day and putting this administration under the machinery of that province?
Mr. MEIGHEN; The subject is not under immediate consideration. I do not know what the attitude of the province of British Columbia would he. The hon. member will remember that, two years ago I think, I put legislation through amending the Yukon Act so as to simplify the local ' machinery of administration. There used to be twelve members of the Local Council and that was cut down to three. Consequently, provision is made for salaries for three instead of salaries for twelve, and the salary of each was, I am pretty sure, reduced. We have simplified the machinery of government and thereby greatly reduced the cost. It seems to me that we would not be gaining much by adding this territory to British Columbia. There would be complications; there is some debt on the province of British Columbia; there is no debt-on the Yukon Territory, and I do not know what the attitude of the people of either British Columbia or the Yukon Territory would be.


Daniel Duncan McKenzie: I would imagine this
would be an advantage to the Yukon. Every province has its educational and other facilities which it is impossible to have in the Klondike if it is administered as it is now, and all improvements which the people of British Columbia have would, in a measure, be extended to this territory if it were within the province and had representation in the Legislature of British Columbia. In that way, it would he an advantage for the people of the whole Yukon Territory to be attached to a province and subject to governmental administration like any other department of the province.


Arthur Meighen: The revenue is about




Jean-Joseph Denis: I see an item "Grant to
Local Council, $90,000." Is there any possibility of reducing the expenditure through reducing these grants? I may be altogether mistaken, but I see no particular reason why the administration of the Yukon Territory should be sustained by grants from the Federal Government. Each province pays its own expenses and the Yukon Territory, as part of the Dominion of Canada, should be under the same provisions as other parts of the Dominion and should pay its expenses. Why should w7e have to give the Local Council a grant of $90,000 a year?


Arthur Meighen: We give every province in the Dominion a grant each year.


Jean-Joseph Denis: But if we take into consideration the respective populations, there is no comparison between the grants that we give to the people of Quebec and Ontario which 'have populations of from over 2,000,000 each, and the grant that we give to the people of the Yukon Territory.


Arthur Meighen: I do not know just exactly how they would compare. Of course, we get a revenue -from the Yukon; we do not get a revenue from Quebec or Ontario. From the Yukon we get a revenue of $97,-
000.	That leaves about $100,000 that the treasury itself is at a loss of. The hon. member must remember this, the Yukon is a far distant territory, and the cost of administration there is bound to be much greater than the cost per capita in a more thickly settled part of Canada, where the climate, soil and methods of living are different. I have in my hand the balance sheet of the Yukon Territory, and I may say, if I have erred at all, as Minister of the Interior in the administration of the Yukon, it has not been on the side of prodigality. I have received a good deal of criticism in respect of that administration, but this is the first intimation that I have been in any way too generous as regards the Yukon.


Jean-Joseph Denis: I am not going that far; I just want to get the information.


Arthur Meighen: I may possibly have
erred the other way. The balance sheet shows a loss of $10,439.88. The cost of upkeep of roads, bridges and public works is $62,000; grants to libraries, etc., $13,000; hospitals, charities and public health, $28,000; schools; $41,695. Schools have to be maintained in the Yukon and they are managed by the local council, but they are supported by the governing body, that is to say, the Department of the Interior. Then there are travelling expenses and salaries,

$9,785. Those are local salaries. Then there is Yukon Council, indemnity and travelling expenses, $4,320. If you put against that the $90,000 Dominion grant, and the Dominion grant for roads of $50,000 and all their sources of revenue, they still had a loss of $10,439.88. Notwithstanding that, we are not increasing the grant.
Dominion lands and parks, $4,546,770.


Charles Alphonse Fournier: I see part of this item is for Canadian National Parks, $666,000. This is an increase of $100,000. Will the minister please explain?


Arthur Meighen: This increase is due
practically altogether to the increased cost of labour and material. We administer those National Parks. The Dominion of Canada-not federally speaking-that is, not speaking from the standpoint of the treasury, but the people of the Dominion- derive great advantage from these National Parks, advantage not only in having recreation grounds for the whole Dominion, but in the tourist traffic, the returns per acre being figured by the officers of the department as being more for the rocks and waste lands of our parks than even for our wheat fields. Undoubtedly, speaking from the whole national standpoint, it is good public business to maintain these parks. Of the increase, .$55,000 is due to increased cost of labour. Since the submission to the House of the Estimates of 1920, there has been an increase in the cost of labour in the parks ranging from 12i per cent in the Albert aparks to 25 per cent in the British Columbia parks. The amount due to increased cost of material is $16,500. The Dominion Parks appropriations for the last six years has been as follows:	In 1914-15,
$681,730. It was not much below that for some years previously; in fact, in some years previously to that year it was much more than that. With the outbreak of the war, the appropriation was cut down. In 1915-16, the appropriation amounted to $349,670; 1916-17, $349,670; 1917-18, $300,000; 1918-19, $300,000; 1919-20	$566,000; 1920-21,
$666,000. There is no increase except such as is caused by increases in cost. The amount this year is $15,730 less than the appropriation for 1914-15.


James Alexander Robb: Has the minister had suggested to him by his officials the advisability of oiling the roads in the western parks? The tourist traffic is becoming so heavy that at certain seasons of the year the roads become somewhat dusty. I agree with the minister that we have no greater source of wealth than the national parks equipped to take care of tourists, who bring an immense amount of wealth to the country. It occurred to me that instead of sprinkling, the minister might make a permanent job of it by oiling the principal roads in the parks.


Arthur Meighen: Mr. Harkin, the head of the Parks Branch, a very competent official indeed, favours that being done. It is only a question of cost. The hon. member will recollect that this year we are engaged in a project of some importance, certainly of some expense, and that is the completion of the Banff-Windermere Road. An agreement was made with the province of British Columbia whereby the Dominion Government took over the completion of that road between the Banff National Park and the provincial road that runs down to the Kootenay and then northeasterly within fifty miles of the limits of the province. The province gave us in turn five miles on either side of the road, quite an extensive territory, which has been added to the national park and which was very essential for the purpose. On account of that expenditure we are not going into any other capital expenditures that we can avoid at the present time. I am informed that we oiled some roads last year, and that we are joroviding for oiling some additional roads this year. The head of the Parks Branch favours the extension of that method just as rapidly as we can do it.


Rodolphe Lemieux: Is the herd of Buffalo
owned by this Government materially increasing?


Arthur Meighen: Very rapidly. We have now about 5,000.


Rodolphe Lemieux: How many were there
formerly?


Arthur Meighen: There were 700. We
have a herd of very great value indeed. The hon. member may have noted that at the recent fur auction sales in Montreal some buffalo heads and robes and some furs were offered there with very encouraging results. The three buffalo heads that we offered sold for $1,025, $610, and $315 respectively. We sold 38 robes at an average of $76. The total amount realized from the small offerings that we put up at the sale was $4,838. Arrangements have also been made for the disposal of the meat of such buffaloes as we find it the part of wisdom to kill, that is, males that we think are sufficiently far on that they should be killed.


Rodolphe Lemieux: I am very much interested in the details given by my hon. friend.

I think it was a wise suggestion that was made some years ago to re-stock our national parks with Buffalo. A fact which is not generally known, but which I happen to know, is that , the idea of bringing back that herd, which was somewhere in Mexico, originated with a younger brother of the late Premier, Sir Wilfrid Laurier. Sir Wilfrid Laurier was very much interested in that herd. His brother was one of the agents of the Government somewhere in Michigan, and had met the owner of this herd of buffalo, and that is how it came about that Canada purchased it.
Referring to the faT away northern regions of which we were speaking a moment ago, poay I ask whether the Government have accepted the idea which was propounded by Stefansson, the famous Arctic explorer, of utilizing reindeer herds for the supply of meat in Canada? I have noticed by the press, and especially by lectures given by 'Stefansson, that he is very much taken with the idea that the reindeer herds, which are very numerous in the Far North, might be utilized for food in the civilized districts, but I do not know whether this idea has taken root with the department or whether anything has been done in connection with the matter.
There is another matter I wish to bring to the attention of the minister. Some years ago the then Minister of Marine, the late Mr. Prefontaine, and later Hon. Mr. Brodeur, sent an expedition to the northern waters of the Atlantic, and reports were made about some very valuable coal deposits in those northern regions. Has anything been done by the department with a view to exploiting those coal areas? Has any definite information been ascertained about their location, and whether they would be worth developing as a commercial proposition?


Arthur Meighen: Replying to the first inquiry as to the utilization of the northern caribou for food purposes, some months ago, on my recommendation, the Government appointed a commission composed of Dr. Rutherford, as chairman; Mr. McLean, the manager of the Harris Abbatoir; Mr. Harkin, the head of the Parks Branch; and Mr. Stefansson, to investigate and report first of all as to the feasibility of the idea, for which, of course, Mr. Stefansson has been the chief sponsor, and secondly, as to any practical steps that might be taken to that end. The commission has held many sittings and has devoted itself assiduously to its work. I may say that the members of the commission have taken the greatest 
possible interest in it, a much greater interest than they ever anticipated they would take when they undertook the task. They have not made a report as yet. In the meantime some practical ideas in Mr. Stefansson's mind developed, and he felt it his duty to withdraw from the commission. Subsequently, he made application himself for a territory in the North. I may say that before that was done, on the recommendation of the commission, three islands in the northern part of Hudson Bay were reserved and set aside for utilization in this way by the Government later on as it might be advised. Then this application came for the lease of what might be roughly described as the south half of Baffin's Land, or more accurately, all the land in Baffin's Land south of the sixty-eighth parallel, and including a strip ten miles wide along the north shore of Lake Nitilling, in the centre of Baffin's Land, which no white man has yet seen. The application was for a lease of thirty years, renewable, of the grazing rights only, for the purpose of the establishment there of a domesticated reindeer herd brought from Northern Europe or such other place as a herd could be obtained. The lease is not signed, consequently I would not care at the present moment to go further into details. In so far as the Government is concerned the authorization of execution has gone through and we await Mr. Stefansson's return here. I believe he has even succeeded in interesting capital. He has interested capitalists who are not strangers to this country but are just that class who would be most likely to succeed in this venture, those of the experience that would warrant a prediction of success, if such could with confidence be predicted of any. So that very marked progress has indeed been made. Having entered into the arrangement with Mr. Stefansson along the lines of this lease, which is prepared and completed, though not executed, and ratified and commended by the commission to which I referred a few minutes ago, we have made rapid progress, and. it really looks as though a practical step was soon to be taken for the development in Baffin Land of a domesticated reindeer herd such as has been developed in Alaska with really astounding success. .There seems no reason why similar success should not attend the enterprise here. The intention is to enlarge the number of domesticated animals year by year by incorporating a limited percentage of native caribou. Of course, proper provisions are made for the protection of the rights of the Eskimo; all rights of shipment,

etc., are taken care of; and the Government is endeavouring to provide for receiving itself certain numbers of these domesticated animals, mainly with the idea of utilizing them for the assistance of the Eskimo and northern Indians who are now suffering very much indeed through the loss of their hunting preserves in certain portions of Ungava and other parts of Canada.
The hon. member (Mr. Lemieux) referred to certain reported coal deposits in Northern Canada. There undoubtedly have been some discoveries of coal in the islands of the Arctic, but I really do not feel in a position to express an opinion as to whether or not they are commercially valuable at the present time. I do not know that the officers of the department have any opinion on that question at least, not the officers of the department of the Interior.


Henri Sévérin Béland: What are the present
regulations governing the hunting of big game in the parks? Is the policy of the department as regards the next few years one of prohibition?	,


Arthur Meighen: Absolute prohibition.


Henri Sévérin Béland: Does the department intend that after a certain number of animals have been acquired through the protection afforded it will permit hunting to some degree?


Arthur Meighen: The time may come in the not-too-distant- future when hunting may be permitted by reason of the increase which the prohibition will effect. But for the present the policy of absolute prohibition is being maintained, and there is no intention, in the near future, at any rate, to depart from that policy.


Henri Sévérin Béland: What number of buffalo will satisfy the minister as being sufficient to warrant a certain amount of hunting?


Arthur Meighen: The buffalo are not to be hunted in any case. We do not intend to expose them to the hunter, no matter how numerous they become. We rather intend to utilize any excess which we think might be got rid of by the sale of the robe, the head and the meat. That is the use we intend to make of them; we will not expose them to the hunter.


Henri Sévérin Béland: Only the official hunter.


Arthur Meighen: Neither the official nor the unofficial.


Charles Gavan Power: I would call attention to
an item' of $4,000, a grant to the Canadian Forestry Association. I should be the last to ask the minister to indulge in any extravagance, but it seems to me that if there is one association in the country which deserves well of the country and of the Government it is the Canadian Forestry Association. Since its inception some years ago it has called the attention of the public of Canada to the fact that our forest resources throughout the country were very rapidly diminishing and that if we did not within a very short time take some action we would be in the same position as the United States; and not having a weaker neighbour I do not know whether we could use any big stick to pass Underwood resolutions. Anyhow, we would have no more wood.


Arthur Meighen: So that we could have no stick.


Charles Gavan Power: Exactly. Since this association has taken up its work it has, by means of lectures and an exhibition car, instructed the people throughout the length and breadth of the country, both the children and the grown-ups, many of whom were in sad need of instruction in this respect, in the necessity for forest conservation. The association has lecturers who tour the country at considerable expense. It is true that their members are fairly wealthy, but to my mind this is a work which should be materially helped by the Government of Canada, and I am sorry to see such a small sum as $4,000 provided for it. You could easily raise the amount to $10,000 and do $10,000 worth of good to Canada.


Arthur Meighen: The amount is the same as in previous years. I believe that the Forestry Association, speaking generally, does very excellent work, and I enthusiastically believe that the work it is undertaking now in the way of public education in the matter of forest conservation is one of great importance. Possibly, if that work develops, we may consider an increased appropriation next year.


Charles Gavan Power: Is the Forest Products
Laboratory included in this?


Arthur Meighen: No, we support that
ourselves. The hon. member must bear in mind that the Forestry Association is made up of men who for the most part have a great deal at stake in forest preservation. It is a fairly large body oif men including some more than fairly well-to-do men. It must also be remembered that the forests are privately owned in. large degree, provincially owned in considerable degree, and federally owned in considerable degree as well. Consequently the obligation is not wholly on the federal Government in this

regard. Indeed, the Federal Government goes to very considerable expense in forest preservation itself. We have felt all along that we were doing our fair share in making this grant to the Association because, while the federal interest undoubtedly is great, the private interest is great as well.


Henri Sévérin Béland: The Government is subsidizing to quite a large degree the Conservation Commission which was created some years ago and which was headed for a number of years by Sir Clifford Sifton. This Commission has interested itself extensively in the preservation of forests and in their preservation particularly against fire. Their findings and recommendations have been adopted, I think, by the Railway Commission and regulations have been issued to the railways. I am not in a position to give the details but I intend at some time when this item is under consideration to supply the House with more information in that regard and especially with reference to the preservation of forests.


James Alexander Robb: There is in this .item a sum of $500,000 for seed grain advances:
Seed Grain Advances-amount required to meet uncollected portion of advances of Seed Grain made in tlie Western Provinces by the Chartered Banks to holders of unpatented Dominion lands under the guarantee of the Dominion Government, also including commission payable to banks for collections, fees to Sec.-Treasurers of Municipalities and officers of the Provincial Departments of Agriculture and clerical assistance, etc., Ja'OO.O'OO.
Does that represent the total grain that was advanced? I suppose that was tor last year, I figured that on the basis of the prevailing prices at the time and .at a very conservative estimate there is -seed grain enough to seed at least 166,000 acres. Are we to understand that seed' grain sufficient to .seed 166,000 acres has been supplied and that the purchasers have defaulted in their payments to the banks?


Arthur Meighen: Yes. The drought in Alberta and .southern Saskatchewan was so extensive and malignant that they were not able to pay. Indeed, the amount of suffering entailed on the farmers of these districts last year is, I think, scarcely apprehended by this House. I went through Alberta and .southern Saskatchewan in August last and the condition of virtual destitution that obtained, in many parts was	distressing. It	was	not a
case of unwillingness to pay; it was a case of no crop at all and a struggle to bring the stock and the family through the winter.

That is the reason the amount is so substantial. This is to pay the banks in respect to the advances made by them and not repaid by the farmers. The amounts advanced were very largely in districts which last year unfortunately were drought-stricken, but the promise this year from all indications now-and indeed the worst of the peril is past-is that the crop will be very prolific. The amount advanced to the banks in 1919 was $632,238.31, and the amount repaid to the banks up to date is $78,026.11, leaving the amount still owing of $554,312.20. That is for last year. We had $575,000 set aside to meet that. It was more than sufficient by about $20,000. For this year there has been advanced: Wheat $387,707.50, oats $228,073.71, barley $15,420. All these articles are at such high prices that it does not take a great many bushels to make up a large amount. The total is $631,201.25. We are asking for $500,000, believing that the excess will be paid. These Estimates were made up some time ago but the weather conditions since have been excellent so that it would look now as if'we would not need this amount.


John Howard Sinclair: Is this for seed for the present year?


Arthur Meighen: Yes.


John Howard Sinclair: I asked some time ago how much was overdue and owing to the Government on account of the advances made on purchases of seed grain tor the use of the Prairie Provinces to the 31st December 1919, and the answer I got was: $1,493,121.11. It would seem that the western provinces are getting into the habit of asking the Government to buy their seed grain. It would appear to men coming from Eastern Canada that the time had almost arrived when the western provinces should be able to finance themselves in so far as seed grain is concerned. I would like to know why we in Eastern Canada are required to advance money for this purpose any longer to wealthy provinces like the Prairie Provinces of to-day. No part of Canada is making money so rapidly as the Prairie Provinces are, and this is getting to be a very old story. Some of the Canadian papers published things that happened 25 years ago. Some days ago I came across an item in the Montreal Gazette:



[Stage Direction]
.	(The Gazette, Feb. 9, 1895.)
Ottawa.-Mr. Nicholas Flood Davin. M.P., is urging that a grant of seed grain be made to settlers in the Moose Jaw and Regina districts. It is questionable, however, whether the request will be granted, as the impression is

general that the settlers In the Northwest have done very well in this respect in the past, and it is about time to call a halt.
That was twenty-five years ago and the halt has not been called. I would like to know if matters are in such a condition that it is necessary to continue to make advances to western farmers in order to finance their seed grain.
Arthur Meighen: We simply finance the homesteaders, il disclaimed all responsibility in connection with privately owned lands two years ago when I came into the department first, taking the ground that it was the duty of the province to provide for all necessary cases of seed grain and relief with reference to private lands. But where we have men on homesteads they are our especial responsibility. The lands, in the first place are not taxable by the provinces and on that account it is always assumed that they are the special responsibility of the Federal Government. Now that was not always the case. In 1914 was it not?-yes 1914-there was such widespread distress throughout all that country, on account of the total failure of crop the year before, that the Federal Government assumed the obligation as respects private land and homestead land, and an amount of $12,309,607.36 was advanced in all. There were many at that time who said- in this House and out of it-that the money would never come back, that it was gone; and it was argued then that even if it was gone the amount that could be expected in the way of production would be of greater advantage to the country and be better for all than if the destitution were allowed to continue and consequently there be no crop at all throughout this acreage of Western Canada. Anyway the money was advanced, most of it for seed grain, $7,560,000; but for relief alone, to simply relieve distress, $4,748,000. Now of that sum of $12,309,000 up to a very recent date there had been returned on principal $9,444,391.38 and on interest $889,387.55. The total repaid was $10,333,778. Now that is returned notwithstanding the fact that in those very districts in the last three years there have been what you might call two complete failures and one semi-failure-in the same districts where all this was advanced-consequently there has been very little that could possibly be repaid in those three years. If this year turns out as it now promises there should be a very small balance left after that and, of course, we have security for this money. 'Consequently there cannot be the slightest doubt of the wisdom of the 209
help given in 1914. However, all we are doing at the present time is this: We provide through the banks .for advances to homesteaders to obtain the necessary seed where they cannot get it any other way. I do not think we are supplying any relief at all other than seed grains. The province has to take care of the rest, and they do it with very much the same machinery and by very much the same method as ourselves. We guarantee the banks money but we only guarantee them five per cent to get their bank interest, and they are only allowed to charge seven. They must collect the money themselves. Unless they collect it themselves all they can ask us for is the five per cent, and if we pay it we take over the security and have the same lien that they have.


John Howard Sinclair: The Government do not collect it then, they pay it to the banks?


Arthur Meighen: Yes, and that is what this vote is for.


Mr. RICHARDSON:: Before the item
carries I would ask the minister if anything has been done with reference to the setting aside of some territory .along the Winnipeg river for a national park; also whether Elk island has been set aside as a game preserve? I would urge the desirability of a park set aside in the province of Manitoba. I do not think we have a park in that great province, and since the boundaries of Manitoba have been extended it would seem particularly desirable that park accommodation should be provided.
M.r MEIGHEN: There has been discussion, and suggestions have been made to the department to -set aside territory along the shores of lake Winnipeg as a national park, but no step has been taken to that end. We have power to do it under the Parks Act, but as yet the idea has not been favourably considered. Elk island has been disposed1 of under a long term lease for summer residence purposes and therefore could not be made a game preserve at the present time.


James Alexander Robb: Reverting to the seed grain question, I quite agree with the minister's statement as to the conditions prevailing in a certain section of the western country, from a point west of Moosejaw and continuing along up. I witnessed those conditions myself. But what I would like now to know from the minister is this: The Government knew of these conditions in September last; was the seed grain purchased



at the initial price established by the board, or did the Government wait until the price had been advanced seventy or eighty cents a bushel and make the purchases this year?


Arthur Meighen: The grain is bought locally, but it is first inspected by the seed commissioner and all orders given can be filled only after such inspection. The bank provides the money. The mam first goes to the Dominion Lands Agent and has his application O.K'd or vised by that agent who knows just what farm he has and takes evidence as to what land is ready for cultivation. From the land agent he goes back to the bank. Then there is seed provided, locally inspected seed, which he can obtain. He gives his security and his note to the bank and goes and gets his seed.


James Alexander Robb: I think the minister has misunderstood my question. The minister himself, as the head of the department, acknowledges that in September last he realized the conditions then prevailing and knew that that section of country required seed. What I want to know is, was the seed bought at the prevailing price in September, October or November, or did the Government wait until the last prices that were put in in the month of March?


Arthur Meighen: I am not sure that I can answer that question. Perhaps some hon. member is present who would know the facts, but my recollection-I fear I have to depend on newspaper reading for this-is that the seed was provided by the Wheat Board at a price of possibly $2.45 a bushel.


James Alexander Robb: Two dollars and forty-five
cents a bushel at the lake port or in the interior?


Arthur Meighen: I think that would be the Port William basis; it was less than that in the interior.


James Alexander Robb: Is the minister sure of that?


Arthur Meighen: No, I am not sure of it at all. I depend on newspaper reading for that. I do not know whether there is any hon. member of the House present who would be more familiar with the subject than I am. However, it does not pertain to this particular item. In this vote we figured on an average of $2.50.


Mr. POWEE:: With regard to another
item-not being on the ministerial side of the House I seem to he among the small items-of $1,000 for the Alpine Club of Canada. Now we have just been told that $4,000 is a great deal to encourage one of ['Mr. Robb.]
our greatest national industries and help us to conserve our forests. If $4,000 was enough for that purpose, it strikes me that $1,000 is altogether too much to help people to attempt to commit suicide on our Canadian Alps. Unless there is another reason for this vote, I do not think we should give the organization in question$l,000,


Arthur Meighen: If every investment
this country makes produces the return on $1,000 that the grant to the Alpine Club does we will soon be a very wealthy people. The Alpine Club is a voluntary organization which, corresponding with the Alpine Club in Switzerland, explores the mountains of Canada and induces tourists from all over the world to take an interest in the Canadian Eockies and in exploration generally of an alpine character in the Dominion. We could not get that work done as cheaply in any other way. We could not get the interest taken and the tourists to come unless we had some such voluntary organization as this-except, of course, .at very great expense. This is just the kind of organization 'to encourage, because we get the results with the least possible delay. They make exhibits at the Alpine Congress, *which has lately been held .at Monaco, and are thereby instrumental in exciting interest in the Canadian Eockies among those who gather there and who are devoted to mountain climbing and to exploration.


Lawrence Geoffrey Power: Is that the best reason
that can be given for the expenditure of $1,000 for advertising? I understand the minister to say that by making this contribution to this particular club we direct the attention of European climbers to the mountains that we have -here in Canada.


Arthur Meighen: We get their money.


Lawrence Geoffrey Power: Yes, but the people who
get the money are the Canadian Pacific Bailway Company and the steamship companies. Why should not these corporations pay for this advertising in order to bring the tourists here?


Arthur Meighen: They spend a lot more than that.


Lawrence Geoffrey Power: They probably do, but it
seems to me that it is their duty to do it, not the duty of the Government. After all, we are not advertising the scenery of our country. If you will come down to Quebec I will show you good scenery. Give me a couple of thousand dollars and I

will advertise it for Quebec; we will form a club and spend it, if you like-we will do anything like that to please the minister. This club is, I assume, composed of wealthy men; mountain climbing is a sport which requires wealth as well as strength and some foolhardiness. Under the circumstances, I think that this money is badly spent. If the minister will devote this $1,000 to forestry purposes, I shall be satisfied.


Georges Parent: There is an item here of
$256,000 for surveys and investigations of water and power resources and for administration of water-powers, etc. I would like some information as to the purposes for which this money is to be spent.


Arthur Meighen: This is the expenditure of the Dominion Water-powers Branch. There is an increase in this item of $39,000. I would like the committee to note that taken all through there is a decrease of about a million and a half dollars in the amount of this vote. The increase of $39,000 is due principally to the following causes: Increased cost of living and expenses of surveys; considerable additional cost arising from the return of many members to the staff from overseas service whose salaries were not paid while absent; certain new work arising under the .agreements which have been executed pursuant to the Dominion Water-powers Act with the provinces of Ontario, Nova Scotia, New Brunswick and Prince Edward Island. Although these provinces own their own water-powers they have sought to obtain the assistance of the Dominion Water-powers Branch in the classification and securing of uniform data with regard to all these water-powers.


Georges Parent: How many years ago did they ask for that assistance?


Arthur Meighen: Nova Scotia about four years ago; New Brunswick about a year and a half ago; Prince Edward Island and Ontario about a year ago. Only a few weeks ago I received a letter of appreciation from the premier of New Brunswick with regard to the services rendered by the Dominion Water-powers officials an relation to New Brunswick water-powers. Representatives from Prince Edward Island have rendered like testimony, and I know that the Government of Nova Scotia are of the same opinion. There is no doubt as to the value of the work done and of the services rendered to these provinces. That is the main cause of additional expense in the last two years, .and it has been an expenditure that 2091
has undoubtedly been of great advantage to the country.


Georges Parent: I should think that the provinces would know what water-powers they respectively possess. It seems to be taking a long time for the Dominion Government to find out what water-powers there are in Prince Edward Island, Nova Scotia and New Brunswick. Surely the country should to-day be in possession of the facts with regard to the water-powers of each of these provinces. Every year we have an Estimate of this sort; yet it is safe to say that the water-powers are not increasing or decreasing. What are we paying for? If there is no answer to that-


Arthur Meighen: I did not want to interrupt the hon. member; I was waiting until he had finished.


Georges Parent: Has any amount been spent in the Ungava district so far as water-powers are concerned?


Arthur Meighen: We have not had any request from the government of the province of Quebec to do for that government what we have done for the governments of the other four provinces named. Should we be requested to do so we would be quite prepared to co-operate with that province as we have with the others. Now, it is not a matter of finding out what water-powers there are in a given province. It is a question of getting all the facts about the waterpower and getting them on such a reliable basis that they are of some use to intending investors. It is necessary to get stream-flow data extending over a number of years and over different periods of each year so that any one who seeks to acquire a waterpower with a view to developing it and establishing an industry based thereon will know just What he is getting and what he can depend on and thus avoid the wasting of capital. In many cases-indeed, I have a case in mind at the moment-capital has been invested on supposed data as to stream-flow; the data has subsequently proved to be unreliable, and great waste has consequently been incurred. Capital is getting more and more careful in the matter of investment in water-powers. The value of this material can scarcely be overestimated. Moreover, it is essential that there be uniformity in the method of estimating water-powers and; the various essential factors of water-powers. A uniform system has been devised, a system that was tested out recently in a conference in Great Britain on the subject of the whole water-

powers of the Empire; it was ascertained to be the best used 'anywhere, and it is now being copied in all the countries that were present at that conference. By means of the systems of the federal Water Powers Branch, the provinces are enabled to get their data, not only reliable gatehered, but made to fit into this uniform system, so that a water-power at any point in British 'Columbia may be compared with a waterpower in New Brunswick in every factor that goes to make up the value of a waterpower. That is what has been done, and the results are apparent and are becoming more and more apparent all the time. Applications are coming in for these water-powers, and the water-powers of Canada are to-day actually developed to a greater percentage, I think I may say, having regard to population, than those of perhaps any other country in the world. We have now something over 2,000,000 horse power developed on the water-powers of Canada. I think that is over 10 per cent of the whole developable water-power in what might be described at habitable Canada.


Georges Parent: I understand from the remarks of the minister that possibly a report has been made to the department by the engineers who have made investigations and surveys. If such a report has been made, I wonder why it has not been published, so that the public would have the information.


Arthur Meighen: The reports are published. I will give the han. member before ten o'clock to-morrow morning more information as to Canadian waterpowers than he will be able to read in two weeks.


Georges Parent: That is going pretty far.


Arthur Meighen: And absorb.


Georges Parent: That is better. The minister, in referring to the Commission of Conservation-


Arthur Meighen: It is the Water Power Branch that has all the material. That has been published somewhat by the Commission of Conservation, but the material has been gathered by the Dominion Water Power Branch.


Georges Parent: Who is in charge of that particular branch?


Arthur Meighen: Mr. Challies is in
charge; Mr. Johnston is next in order.


James Alexander Robb: Are these gentlemen hydraulic engineers?


Arthur Meighen: Yes, they are both hydraulic engineers.


Georges Parent: Have these engineers
made a special survey of the St. John river in New Brunswick, and if so, what is the result of their investigation?


Arthur Meighen: Mr. Smith is engineer in charge down there, and I would be only too pleased if the hon. member would write to the premiers of each of the Maritime Provinces as to their opinion of Mr. Smith's suitability and capacity for the .work.


Georges Parent: I am not discussing that at all.


Arthur Meighen: He has made a special survey of the water-power of the St. John river. I do not know if it is completed or not; but I have no doubt a considerable amount of information could be abtained at our branch, or perhaps more fully up to date information could be obtained from the New Brunswick Government itself, because Mr. Smith works immediately in cooperation with the Government of New Brunswick.


Georges Parent: If this estimate was being presented in the New Brunswick legislature, the remarks of the minister's would apply properly. If I were applying to the Premier of New Brunswick, I could probably get more information than I can from the minister now. But this Estimate is for $256,000 spent by the Dominion Government on surveys of different water-powers in New Brunswick, Nova Scotia and Prince Edward Island. I ask the minister if his department out of this sum of $256,000, has spent any amount in surveying the St. John river in New Brunswick, and if so, what is the result of that investigation. My question is addressed, not to the Premier of New Brunswick, but to the Minister of the Interior whose Estimates are before Parliament.


Arthur Meighen: This money is not
spent yet; it is to be spent. ,


Georges Parent: Has nothing been spent
in the past?


Arthur Meighen: Yes, but not this sum.


Georges Parent: What has been spent in
the past?


Arthur Meighen: Money has been spent, and as I informed the hon. gentleman, some of it has been spent in respect of an investigation into the waterpowers of the St. John river. But the result would be very meagre if it were such that a minister, especially a minister who is not an engineer, could from hi!s place in the House give the result to an hon. member opposite.

It would not be any good at all, if it was of that character. The report is compiled in such shape that a layman can understand it all right. I do not know just how far the investigation has progressed in relation to the waterpowers of the St. John river, but the report is compiled and the hon. member is quite welcome to it. He can obtain it most directly by going to the Waterpowers Branch; and I said as well that it would be available in the offices of the provincial Government of New Brunswick. The hon. member, however, does not need to go there; he can take his choice. The report is available there for any intending investor.


Michael Steele: Shall the item carry?


Georges Parent: I should like to get an answer before I decide on this item. It may be all right for the minister to make the remarks he has made, but I believe the committee is entitled to find out where and how this money has been spent. When we are told during the last four years Prince Edw.ard Island, Nova Scotia and New Brunswick have been using that money to find out what waterpowers they possess in their respective provinces; we ought to know what they discovered in those provinces and whether that amount of money was spent to some useful purpose.


Arthur Meighen: Does the hon. member want me to tell him how many waterpowers there are on the St. John river, what the best method of development is, what the stream in low water season is, what the best reservoir system is, and so on? Is that the information which he thinks I ought to give to the committee?


Georges Parent: If the department has done some work on the St. John river, I should like to know what it has done. If no result has been obtained, why spend money in this way?


Arthur Meighen: There are results. Does the hon. member mean that I should put the report on the Table of the House before this item passes, or does he want me to read over all the report?


Georges Parent: If the minister has the information, I have no objection.


Arthur Meighen: Then, we shall be here for a week. What is the hon. member trying to do? He surely does not mean that I should read over the reports of our engineers in regard to the St. John river. Those reports are available for any member of the House. If the hon. member desires
that they be put on the Table, there is no objection to that. Does he expect me to give the committee in detail all this scientific information?


Georges Parent: My question is very simple.


Arthur Meighen: Yes, the hon. [DOT] member asks me if this is all for nothing. Certainly, it is not for nothing, far from that; it is for the most useful results.


Georges Parent: What are those results?


Arthur Meighen: They are embodied in those reports.


Georges Parent: Let the minister give us an idea of what those reports are and what the engineers find.


Michael Steele: Shall the item carry.


Mr. CANNON:: No. I think the hon. member is very fair. This is a large item. Work has been done in the past, and the hon. member asks the minister what work has been done and What results have been obtained. The minister says that is a difficult thing to do. That may be so, but the minister is surrounded in this Chamber by his officers, and if he cannot go into every particular detail, he can give a summary to the committee. After all the minister, even though he is a minister, has to give information to the House when he wants money. We are not going to vote money without knowing the purpose for which it is intended. What is going to be done, with this money this year? If the minister says that it is for scientific purposes, let us know for what scientific purposes. I think the inquiry by the hon. member (Mr. Parent) is very fair and the minister ought to give us the information. [DOT]


Arthur Meighen: If the hon. member will ask for any detail I will endeavour to get it.


Georges Parent: How many water-powers are there on the St. John river, and on what particular ones have the engineers been working?


Arthur Meighen: The two I recall offhand are the Grand Falls site on the St. John river, about 50,000 horse-power, and the Great Falls site about 50,000 horsepower. On the Indian river in Nova Scotia the province of Nova Scotia is expending approximately $1,000,000 in development, based on the data obtained through Mr. Smith and the Water-powers Branch. I do not know just what British Columbia purposes doing, but I do know what the opinion of the Prime Minister is

as to the work. Of course, everybody knew that these two falls were on the St. John river. It is not to find out whether the falls are there that the Water-powers Branch is working. The information they gather is as to the minimum and maximum stream flow over a number of years, the best method of developing that water-power, the 'best utilization to make of it, the best system of reservoirs, so as to make the maximum flow of the high season available in the low season, and all such data as that, best understood by enginers, but which is so prepared, though in very detailed form, that anybody can understand it after study.


Georges Parent: I gather from the minister's remarks that now they have all this data concerning the falls on the Indian river in Nova Scotia, and Grand Falls in New Brunswick, which I understand to be the most important water-powers of these two provinces, that he would have no objection to reducing this item this year, as the most important work of the engineers must be over.


Arthur Meighen: The investigations proceed from the more important rivers to the less important rivers. I do not think they are complete even as to the powers on the St. John river. The investigations certainly are not completed as to the other water-powers of New Brunswick, and they are being undertaken for the first time in Ontario. It is only about a year since we made our agreement with Ontario, so that is one extra account this year. The main cause of the increase, of course, is not only this co-operative work with the provinces, but the increased cost of surveys and materials.


Mr. PAREWT:: What kind of agreement has been entered into between the Dominion Government and the Ontario Government in regard to this matter?


Arthur Meighen: I can lay a copy of the agreement on the Table. It is just the same in substance as the agreement we made with Nova Scotia and New Brunswick. It provides for the supply of a certain number of men, by hours, under the Water-powers Branch, and for equipment. They undertake to provide certain supplies, provisions to the men, and so forth.


Arthur Trahan: How much will be expended in New Brunswick next year?


Arthur Meighen: About $9,500.


Arthur Trahan: In Nova Scotia?


Arthur Meighen: Also $9,500. Prince Edward Island $1,000, and Ontario $41,000.


Arthur Trahan: That does not amount to $256,000.


Arthur Meighen: No, because we have our own water-powers. It was the hon. member for Quebec who said it was all being spent there; I never said it. We have our own water-powers in Western Canada and in British Columbia. We have no agreement with the province of Quebec, but we are just as ready to make an agreement with them as with any other province. Included in the water-powers of Quebec, of course, are the powers of the St. Lawrence river. There is considerable information on that now, and these powers are being pretty much developed, but there is no question that a very great deal of valuable work could be done in that province.


Arthur Trahan: What surveys of water-powers will be made in New Brunswick next year?


Arthur Meighen: The basic work is the stream measurement, not of any special river, but of all the rivers. That goes on concurrently. The staff is also engaged in gathering other data, first, as regards the major water-powers, and next as regards the minor water-powers.


Arthur Trahan: Under the agreements the minister has referred to do the provinces pay a part of the expense of the surveys and investigations, and if so, what part?


Arthur Meighen: The division is something like this: The Water-powers Branch does the main basic fundamental work in order that it may be done the same in all the provinces, and in order that the information may be related to fixed standards. Then the province does the special detailed work.


Georges Parent: Has this department anything to do with the protection of fish where a water-power is being developed on a river?


Arthur Meighen: In Western Canada, where we own the water-powers, when we are making an agreement with the party who develops the power we insist that he provide a fishway, and I have no doubt that the provinces would similarly provide with respect to their water-powers in any agreements made by them.


Georges Parent: I am calling this matter to the attention of the minister because all the provinces are not following the same practice. The requirements as to the construction of a dam and fishway are not the same in all the provinces. I would impress on the minister and the department that if

they would draw up plans and specifications which would be distributed to every province, so that we would have uniformity in the building of dams and fishways, they would be rendering a good service to the country at large.


Arthur Meighen: I think that is especially the province of the Department of Marine and Fisheries. We comply with t-heir regulations in connection with all our water-powers in Western 'Canada, and I would expect the -provinces would comply with the same regulations, this being a fisheries matter, so there should be uniformity.


Lucien Cannon: I have seen in the papers that it was the intention of the Government to hand back to the western provinces their natural resources. If that is correct, will the water-powers be included in those natural resources?


Arthur Meighen: I cannot say whether
they will or not. It would depend on the final result of negotiations. I have taken the ground that it would be better not to include them, for the reason that the rivers upon which the water-powers appear are interprovincial rivers; and the control of those rivers, as regards the water-powers as well as irrigation, would seem to me to be better within the purview of the federal authorities. It would have been better for Ontario and Quebec had that rule applied. I have heard many authorities say that there would have been much better development of the Ottawa river, for example, had it not been for the divided authority on either side. However, it is not for me to say whether the water-powers would go with the other resources or not. I only express my individual opinion when I say that I think it would have been better for all concerned if this were not the case.
Investigations, triangulations, precise levelling, topographic and field astronomic work, etc., $291,000.


Arthur Meighen: There is an increase in the Geodetic Survey Branch. We have 21 men back from overseas, and last year's vote was cut down to such an extent that we could not keep the men in the field. We were paying them salaries but had to bring them in before the season was nearly over because we had not money to supply the equipment to go on; and at the same time we were called upon by other departments to prosecute geodetic surveys, for several of the departments depend upon us in that respect. We have these men back from overseas, and unless there is an increased vote we shall either have to dispense with
them, although their services are required, or else utilize them half of the time and pay them all the time. That is the reason I ask for this increased vote. We desire to use the men all of the time to good advantage.


Cyrus Wesley Peck: Does the minister not consider that the work of the different survey departments of the Government might be concentrated and centralized under the Geodetic Survey Branch, as in the United States? In the minister's department there is a Topographic Survey, and there is a Tidal -Survey in the Marine Department, and it seems to me that there may be some duplication of work. Perhaps it might be in the interest of efficiency and economy to have this survey work centralized.


Arthur Meighen: The matter has been
brought to my attention, and I gathered the surveyors together one day and discussed it. I remember that my chief impression was that there had not been nearly so much duplication as I thought there had been. There is, of course, some duplication, and possibly reorganization under a single head would be better, but there are difficulties in that direction. However, I intend to go further into the matter in the coming year.
Expenses connected with the survey and demarcation of International Boundaries, including $1,0-0-0 to J. J. McArthur as International Boundary Commissioner, $45;7-0'0.


Georges Parent: What is this money required for and where will it be spent?


Arthur Meighen: The International
Boundary survey has been going on for years and years. It is nearly complete, and that is why we are contracting the expenditure each year. It is reduced this year by nearly $18,000. -


Georges Parent: What part of the country is the work being performed in now?


Arthur Meighen: I am informed that
this is nearly final; there will not be much next year. I can tell the hon. member where the money is spent. It is for more complete .marking of the boundary line between Alaska and British Columbia in the neighbourhood of Portland canal and the Unuk and Stikine rivers, this territory having been surveyed fourteen years ago, when monuments were placed at irregular intervals. Great mining development has taken place in those districts close to the boundary within the last few years. The mines are near the boundary, and fortunate-

ly for Canada they are on the Canadian side. In my opinion, there will have to be a permanent commission whose duty it will be to maintain these monuments. I do not think ,we can get along without it, and there will have to be a convention between the two countries to provide for the permanent maintenance of the monuments now virtually completed all along the 5,000 odd miles of boundary.


Lucien Cannon: If this -commission is appointed, is it the intention of the Canadian Government to make the -appointments, as regards the Canadian commissioners, without consultation of the Imperial Government?	(


Arthur Meighen: I do not know what the practice is, but I should think that whether there would be consultation or not, the selections would virtually be made by the Canadian Government. The boundary commission .is now composed of officials of this Government alone, Mr. McArthur being at the head of it.


Lucien Cannon: I -asked the question because, as the minister has mentioned, a part of the work for which this Estimate is asked will be done in Alaska. I suppose that work is to put into force the conclusions of a famous Alaskan Boundary Commission, the result of whose -investigations was most unsatisfactory to all .Canadians. As the minister knows, on that commission there were two -Canadian commissioners who refused to sign the conclusions arrived -at by the majority. The Canadian commissioners were over-ruled by the American commissioners, with whom the British commissioners joined hands. I infer from the past, therefore, that whenever questions arise as to the determination of boundaries between Canada and the United States the Imperial Parliament has always made appointments. If, in future, the suggestion expressed by the minister to-night were adopted; that is to say, if the commissioners were solely appointed by the Canadian Government, the results might be more satisfactory.
Progress reported.
On motion of Hon. Mr. Meighen the House adjourned at 1 a.m. Wednesday.
Wednesday, June 9, 1920.